Transitional properties - freehold or freehold equivalent interests held prior to 1 July 2008
What if further development is carried out on or after 1 July 2008?
This development creates a capital good for the purposes of the Capital Goods Scheme (CGS) and is referred to as a refurbishment.
If the owner of the property uses the property for the purposes of his or her business, their only obligations will be to adjust for any changes of use (from taxable to exempt or vice versa) under the CGS.
What happens if the redevelopment work makes the transitional property new?
Where development is carried out on or after 1 July 2008 and that development makes the property new (not a minor development), then the property is not treated as a transitional property. In such cases, the normal rules apply to any subsequent sale.
It is important to note that the test of whether or not a property has been made new by virtue of such a development, only applies when the property is sold.
Next: Capital Goods Scheme (CGS)