Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Readers’ forum: Farm buildings

09 August 2021
Issue: 4804 / Categories: Forum & Feedback
Is there VAT on farm buildings left by tenant?

We act for a farming company which has rented out a big parcel of land to another farmer for 20 years.

The tenant is now leaving and has paid VAT on his rent all this time ie my client has opted to tax the land in question.

During his period of occupation the tenant has constructed several buildings on the land which he probably should not have done but they were necessary for his farming activities. My client has agreed that the buildings will remain after the tenancy and the company will compensate the tenant £60 000 for them.

Should the tenant invoice my client for the buildings? If so should he charge VAT? And if the answer is yes to the second question can my client claim input tax of £12 000 on the company’s next VAT return?


If you or your firm subscribes to, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or '' for further assistance.

back to top icon