Sch 10 para 28 Pre-option exempt grants: requirement for prior permission before exercise of option to tax
(1) This paragraph applies if— (a) a person wants to exercise an option to tax any land with effect from a particular day, (b) at any time (“the relevant time”) before that day the person has made, makes or intends to make an exempt supply to which any grant in relation to the land gives rise, and (c) the relevant time is within the period of 10 years ending with that day. (2) The person may exercise the option to tax the land only if— (a) the conditions specified in a public notice are met in relation to the land, or (b) the person gets the prior permission of the Commissioners (but see also paragraph 30). (3) The Commissioners must refuse their permission if they are not satisfied that there would be a fair and reasonable attribution of relevant input tax to relevant supplies. (4) For this purpose— “relevant input tax” means input tax incurred, or likely to be incurred, in relation to the land, and “relevant supplies” means supplies to which any grant in relation to the land gives rise which would be taxable (if the option has effect). (5) In deciding whether there would be a fair and reasonable attribution of relevant input tax to relevant supplies, the Commissioners must have regard to all the circumstances of the case. (6) But they must have regard in particular to— (a) the total value of any exempt supply to which any grant in relation to the land gives rise and which is made or to be made before the day from which the person wants the option to have effect, (b) the expected total value of any supply to which any grant in relation to the land gives rise that would be taxable (if the option has effect), and (c) the total amount of input tax incurred, or likely to be incurred, in relation to the land.