Article 4

After article 5(2) insert—

“(2A)

The conditions referred to in paragraph (2) above are that the transferee has, no later than the relevant date—

(a)

made an election in relation to the land which has effect on the relevant date and has given any written notification of the election required by paragraph 3(6) of Schedule 10 to the Act; and

(b)

notified the transferor that paragraph (2B) below does not apply to him.

(2B)

This paragraph applies to a transferee where—

(a)

the supply of the asset that is to be transferred to him would become, in relation to him, a capital item as described in regulation 113 of the Value Added Tax Regulations 1995^f1 if the supply of that asset to him—

(i)

were to be treated as neither a supply of goods nor a supply of services; or

(ii)

were not so treated; and

(b)

his supplies of that asset will, or would fall, to be exempt supplies by virtue of paragraph 2(3AA) of Schedule 10 to the Act.”^f2.