Jurisdiction(s):
United Kingdom

Key definition

Anti-avoidance definition

What does Anti-avoidance mean? Anti-avoidance describes measures used to stop parties structuring transactions to sidestep statutory liabilities or weaken creditor protections. In pensions practice in the UK, it most often refers to The Pensions Regulator’s (TPR) powers to deter or remedy avoidance of defined benefit scheme obligations, especially the section 75 employer debt. Although “anti-avoidance” is a descriptive term, key powers are set out in legislation. Under the Pensions Act 2004 (as amended, notably by the Pension Schemes Act 2021), TPR may issue: - Contribution notices (CNs), requiring payment to a scheme. Statutory “tests” include main purpose, material detriment, and (from 2021) the...

UK VAT option to tax: disapplication for dwellings, RRP/RCP buildings, housing association and self-build sites, and residential caravans/houseboats—certification, timing, mixed-use apportionment and CGS implications

Published by a LexisNexis Tax expert

Practice notes

Disapplication of the VAT option to tax for residential and some other property

This Practice Note explains when the VAT option to tax is disapplied for residential and certain other property, and refers to the Practice Note on the option to tax land and buildings. It does not address disapplication under the Anti-avoidance provisions; for that, see the Practice Note on option to tax—disapplication under anti-avoidance Rules. Where the conditions bite, they override an option to tax so that a sale or letting is exempt. In situations where these provisions apply, the purchaser or tenant would be unable to reclaim the VAT, so exemption can be a valuable advantage. However, the vendor or landlord would be unable to recover associated VAT and may face a charge under the capital Goods scheme (CGS); see Practice Note on VAT—capital goods scheme (CGS). These consequences must be taken into account on any deal. Often the parties can decide whether to disapply the option. Ideally, this should be negotiated, and in cases structures can remove a VAT exposure. The purchaser or tenant may have to issue a certificate for the disapplication to take effect, and there are timing rules governing this...

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Martin Scammell

Martin Scammell is an independent VAT consultant, specialising in property and construction matters, who works with tax departments in major corporates and universities, and with a number of law and accountancy firms. He is the author of the leading reference work on VAT and property.Martin started out in VAT Policy in Customs & Excise, was a Partner at Ernst & Young, where he headed up the VAT real estate group, and then became head of indirect tax at Eversheds.He has been involved in the development of VAT legislation and policy over many years, and regularly serves on working parties established by HMRC. He was a member of the Office of Tax Simplification’s consultative committee for their review of VAT in 2017, and in 2018-19 of HMRC’s external stakeholder group considering the proposed reverse charge for building work. Martin currently works with HMRC as...

Web page updated on 22/05/2026

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