Non-business use of property

There are certain rules dealing with situations where a property is used for, or diverted to, a private or non-business use. The treatment of both private and non-business use is the same.

Private use is generally the use of an asset for personal purposes, for example, where a person uses part of a business premises to live in. Non-business use is any use of a business asset that is not for the purposes of the business.

There is a different Value-Added Tax (VAT) treatment of the non-business use or diversion to non-business use, of property acquired or developed prior to 1 January 2011, to property acquired or developed on or after 1 January 2011.

The diversion of a property from taxable use to exempt use is dealt with by the Capital Goods Scheme (CGS).

Further guidance contains more detailed information on the VAT implications of the non-business use, or diversion to non-business use of property.