44. Non-business use of immovable goods

Summary

This section deals with the private or non-business use of property. It provides for the calculation of the taxable amount when business assets are diverted to non-business use.

Details

(1) Subsection (1) sets out how to calculate the amount on which tax is chargeable for a taxable period when business assets consisting of immovable goods are used for private purposes or non-business purposes. Effectively, the amount is derived by dividing the acquisition or development costs incurred by the business by 20. For any private or non-business use of the property during a taxable period, the appropriate proportion of one sixth of that amount is taxable (because there are six 2-month taxable periods in a year).

(2) Subsection (2) provides for the making of regulations specifying the method to be used to identify the extent to which goods are used for private or non-business purposes – see Regulation 7 of the VAT Regulations 2010.

Relevant Date: Finance Act 2020