§ Mr. Brooke
To ask the Chancellor of the Exchequer if he will make a statement concerning the payment of rent in the context of section 37 of the Finance Act.
§ Mr. Oppenheim
Section 37 is an anti-avoidance measure dealing primarily with the situation where a person funds the purchase or construction of a building with a view to occupying it for VAT-exempt purposes. The measure has been drafted so as not to disturb ordinary arms-length commercial leasing arrangements and genuine speculative property development. In these circumstances a tenant simply paying rent is not providing finance for the landlord's initial purchase or construction of the building.