35. Waiver of exemption under old property rules — backdating and cancellation

(1) In this Regulation—

“back-dating”, in relation to a waiver, means the waiving of a right to exemption from tax in respect of an exempt letting of immovable goods to which paragraph 11 of Schedule 1 to the Act applies (in this Regulation referred to as a “specified letting”) from a date earlier than the current taxable period, and “back-dated” shall be construed accordingly;

“cancellation request period” means the taxable period during which a request for the cancellation of a waiver of exemption is made in accordance with paragraph (7);

“waiver” means the waiver by a person of his or her right to exemption from tax on a specified letting.

(2) Where—

(a) an accountable person makes a specified letting, and

(b) the immovable goods which are the subject of that letting were acquired or developed by him or her before 1 July 2008 for the purpose of his or her taxable supplies,

that person may apply to the Commissioners to backdate the waiver of his or her right to exemption in respect of that letting.

(3) An application under paragraph (2) is required to be made in writing to the Commissioners and to include the following:

(a) the full name, address and registration number of the accountable person making the application,

(b) the tenant’s name, address and registration number,

(c) details of the letting agreement, and

(d) the date from which the accountable person desires that the waiver shall have effect.

(4) A waiver of exemption shall be backdated only where the tenant would have been entitled to deduct, in accordance with section 12 of the repealed enactment, all the tax that would have been chargeable in respect of the letting if the waiver had applied from the date specified in accordance with paragraph (5) to the date on which the Commissioners issue the notification referred to in paragraph (5).

(5) Where the Commissioners are satisfied that an applicant has complied with paragraph (3) and that paragraph (4) applies, then they shall notify the applicant that the waiver may be back-dated in respect of the letting for which back-dating of a waiver was sought specifying the date to which the waiver is to be back-dated, being a date not earlier than 26 March 1997 and not later than 30 June 2008.

(6) Any tax chargeable prior to the date the Commissioners issue the notification referred to in paragraph (5), which becomes chargeable on the letting of immovable goods as a result of the back-dating of a waiver, is deemed to have been due and paid by the applicant in accordance with Chapter 3 of Part 3 of the Act and deducted by the tenant in accordance with Chapter 1 of Part 8 of the Act.

(7) A person who waives his or her right to exemption in respect of a specified letting is entitled to have such waiver cancelled provided he or she—

(a) applies to the Commissioners in writing to have the waiver of his or her right to exemption cancelled,

(b) furnishes particulars to the Commissioners of—

(i) the tax due and accounted for by him or her, in accordance with Chapter 3 of Part 3 of the Act, in relation to the supply of services by him or her to which the waiver applied for all taxable periods comprised in the period commencing with—

(I) in the case of a back-dated waiver, the start of the period in which the Commissioners issued the notification referred to in paragraph (5), or

(II) in any other case, the taxable period from the commencement of which the waiver of exemption has effect,

and ending with the last day of the taxable period immediately preceding the cancellation request period, and

(ii) the total amount of tax deducted or deductible by him or her referred to in section 96(3)(a), (c) and (d) of the Act in respect of all of the taxable periods comprised in the appropriate period referred to in clause (i), together with the total amount of tax deducted by him or her referred to in section 96(b) of the Act,

and

(c) pays to the Collector-General an amount equal to the excess (if any) of the tax referred to in subparagraph (b)(ii) over the tax referred to in subparagraph (b)(i).

(8) Where a person complies with paragraph (7) to the satisfaction of the Commissioners, his or her waiver shall be cancelled with effect from the end of the taxable period during which he or she so complies. The Commissioners shall notify the person of such cancellation in writing, and from the end of that taxable period the person shall be treated as a person who had not waived his or her right to exemption.

(9) A person who applies for the cancellation of his or her waiver in accordance with paragraph (7) is not entitled, under section 99(1) of the Act, to any refund of tax, other than a refund referable solely to some error or mistake made by him or her, for the cancellation request period or any subsequent taxable periods, in relation to all the lettings to which the waiver relates, in excess of an amount calculated in accordance with the following formula:

A + B

where—

A is the excess of the amount referred to in paragraph 7(b)(i) over the amount referred to in paragraph 7(b)(ii) but, where there is no such excess, A is equal to zero, and

B is the sum of the amounts of tax paid under sections 76 and 77 of the Act, in relation to all the lettings to which the waiver relates, for the cancellation request period and any subsequent taxable periods until the waiver is cancelled.