VAT on property: amendments to Pre-Contract VAT Enquiries and Special Condition 3 (August 2011)
Last year, practitioners were invited to make submissions regarding amendments or refinements to Law Society’s Pre-Contract VAT Enquiries (PCVE) and Special Condition 3 of its standard contract for sale in relation to VAT on property in order to improve their efficiency and fitness for purpose. The Law Society Taxation and Conveyancing Committees have decided to make the following amendments.
Special Condition 3
- Clause 3.2.2, 3.3.1, 3.5 and 3.6.2 includes a reference to section 94(7) of the VAT Consolidation Act 2010 to ensure that the provisions for the exercise of the joint option to tax includes liquidators/receivers/MIP type sales,
- Clause 3.7 is amended to include the words ‘of the Subject Property’ after ‘Sale’ for clarity purposes,
- Clause 3.9, 3.10 and footnote 11 have been amended for greater clarity regarding legacy leases. They now read as follows:
- “3.9 On the Assignment or Surrender of an interest in an occupational lease (which is not a legacy lease) for a premium…”,
- “3.10 On the Assignment or Surrender of an interest in an occupational lease (legacy or otherwise), the Vendor….”,
- Footnote “11 Required only if Special Condition 3.7 or 3.10 are used…”
- “and enquiries 2.2 and 2.3” are deleted from Clause 1.2 for clarity purposes.
The updated PCVE and Special Condition 3 are now available on both the Conveyancing and Taxation Committees’ web pages in the members’ area of the Society’s website.