Consultation tracker

A facility to elect to waive exemption on supplies of commercial property (referred to as 'the option to tax') was introduced from 1 August 1989. Changes in 1995 allowed an option to tax to be revoked after 20 years (or within 3 months of being made), subject to the written consent of the Commissioners being obtained. Options will therefore first become eligible for the 20-year revocation from 1 August 2009.

Following the consultation announced at the 2004 Pre-Budget Report, HMRC has now published a summary of the responses received to the consultation. It is available here.

In order to help businesses plan for the future, HMRC are now announcing the proposed conditions under which written consent to revoke an option to tax will be given (together with changes to the other related issues covered by the consultation). The necessary legislation and guidance will follow in due course.

Written consent for revocation will be possible by two routes, either 'Automatic Consent' or 'Permission Consent'. Full details are set out in the business brief, which also sets out HMRC views on: error corrections and penalties; early revocation; the position of tenants; global options and the “universal” option; VAT groups and the option to tax; demolished buildings and options on bare land; and extensions and linked buildings.