Introduction Background Note
5.On 18 December 2008, the High Court ruled in the case of Mason v Boscawen that the VAT charged on rent is part of the rent for the purposes of the Agricultural Holdings Act 1986.
6.It was noted that a change in the rate of VAT chargeable is a change of rent which therefore, prevents the parties to a lease from referring the rent to arbitration for a period of three years from the date of the rate change. The exercise or revocation of the option to tax by a landlord also has the same effect.
7.The section causes changes in the VAT chargeable on rents to be disregarded for the purposes of the rent arbitration provisions of the AHA. It is effective for rate changes, options or revocations which occurred before the date of Royal Assent.