Revoking VAT option to tax elections

Key points

• The option to tax regulations for property transactions were introduced on 1 August 1989.
• The election is made only on land so applies to the whole building on the land.
• There is an exception for residential property forming part of commercial premises.
• The election stands for 20 years.
• Interaction with the capital goods scheme and the partial exemption.

1 August 1989 was a massive date in the world of the nation’s favourite tax. The option to tax regulations for property transactions were introduced on that day and to quote the famous words of Sir John Major on the passing of legendary cricket commentator Brian Johnston: ‘Summers will never be the same again.’

A feature of the legislation passed in those heady days of yuppies fast cars and cucumber sandwiches at village cricket matches was that an option to tax election made with HMRC on a property could not be revoked by a taxpayer until it...