HMRC Issues New Guidance on VAT Treatment for Land Overages and Property Transactions

• HMRC has released new guidance on VAT treatment for overages in land transactions.
• An overage is an additional payment made after a land sale when the land’s value increases.
• VAT on overages is assessed separately from the initial sale and determined at the time of the overage payment.
• Overage payments may be subject to standard VAT rates if an option to tax is applied after the initial sale.
• For new commercial buildings, overage payments are always taxable at the standard rate, regardless of time elapsed.

Source: marcusward.co

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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