Licence with Guardian Company

We have a licence set up with a guardian company for one of our ASC properties.  The company pay us 50% of the rental income collected from guardians after operating costs.  Can I check that this is exempt income?  The property is not opted to tax.  Thanks

  • you might refer the enquirer to the decision in Ad Hoc Property Management Ltd (TC/2017/01357) which concerned this subject.  While only a First-Tier Tribunal decision it does seem to indicate HMRC’s now position, as the appeal was triggered by their imposition of an assessment for VAT not declared on property guardians’ fees but, following legal advice, then withdrawn on the grounds such fees represented consideration for the grant of a right to occupy land, the dispute thus concerning Ad Hoc Property Management’s abortive costs incurred in appealing the assessment.  On property guardians’ fees, the Tribunal observed (at para 21) that the starting point is always the contractual agreement entered into and, in this case, it concurred that the agreement entered into between the property owners and Ad Hoc Property Management granted the latter sufficient interest in the property as to be able to grant a right of occupation to the guardians.  Best wishes!