Transitional measures applying to legacy leases
This section deals with the transitional measures applying to legacy leases. Together with freehold interests or freehold equivalents held prior to 1 July 2008, these leases are referred to as transitional properties.
Legacy leases are interests in property:
- that were treated as a supply of goods under the old Value-Added Tax (VAT) on property rules
- and
- which is a lease of ten years or longer created prior to 1 July 2008.
The term does not include interests that constitute freehold equivalent interests.
The lease must:
- have been held by a taxable person on 1 July 2008
- and
- form part of the assets of a business at that date.
The following come within the transitional measures:
- the VAT treatment of the assignment and surrender of legacy leases
- the VAT treatment of deeds of variation
- how to account for VAT on legacy leases
- Capital Goods Scheme (CGS) and legacy leases
- legacy leases post-letting expenses
- sale of a property following the surrender of a legacy lease
- the VAT treatment of a legacy lease reversion.
Further guidance contains more detailed information on the VAT treatment of transitional measures applying to legacy leases.