Article 2

For Note (7) in Group 8 of Schedule 5 to the Value Added Tax Act 1983^f1 there shall be substituted the following–

“(7)

The grant of an interest in, or in any part of–

(a)

a building designed as a dwelling or number of dwellings; or

(b)

the site of such a building,

is not within item 1 if–

(i)

the interest granted is such that the grantee is not entitled to reside in the building, or part, throughout the year; or

(ii)

residence there throughout the year, or the use of the building or part as the grantee’s principal private residence, is prevented by the terms of a covenant, statutory planning consent or similar permission.”