Matrimonial Matters

[Louise Smith]

Our client resides overseas so when dealing with the divorce itself that would be OOSUKVAT however when dealing with the finances where there is property/land would this fall as Vatable or would it still be OOSUKVAT. I can see from something else that has been written that if an estate is being dealt with by someone that doesn’t belong in the UK, that is made up of predominantly land this would fall under the services of Lawyers rather than Land and property. If we were to apply that logic then this scenario would also be the same. If we were to however deal with the conveyance of said property this would fall as standard rated VAT.

Any clarification anyone can give would be great.

Thanks

Louise

[Tiffany]

Hi Louise
You’re right to be thinking carefully here — VAT treatment in cross-border legal services, particularly involving overseas clients and UK land, can be nuanced. Let’s break this down with reference to UK VAT rules, particularly Place of Supply, land-related services, and legal services.

🔹 Scenario Summary:
Client: Resides overseas (outside the UK).

Matter: Divorce proceedings (OOSUKVAT – Outside Scope of UK VAT).

Additional Work: Dealing with finances including UK land/property.

Question: Is this still Outside Scope of VAT (OOSUKVAT), or standard-rated (20%)?

Key VAT Rules to Consider:
1. Place of Supply – General Rule for Services
For business-to-consumer (B2C) services like legal advice:

The place of supply is where the supplier belongs — i.e., the UK.

So in general, legal services to a non-UK client are UK supplies and would be standard-rated, unless an exception applies.

BUT…

2. Outside the Scope of VAT (OOSUKVAT) – Legal Services to Overseas Clients
Legal services not connected to UK land and provided to a non-UK client may fall outside the scope of UK VAT under the “use and enjoyment” rules or because the place of supply is overseas under special rules.

So for the divorce itself, where the subject matter is not land, you’re correct:

✅ OOSUKVAT — legal services to a non-UK resident client relating to the divorce only.

3. Services Relating to UK Land or Property
There is a specific VAT override rule for services “directly connected with land”:

If a service is directly related to UK land, the place of supply becomes the location of the land, regardless of where the client resides.

This means UK land = UK VAT applies, even for overseas clients.

🔴 Example: Conveyancing, boundary disputes, leases, transfers of title → all standard-rated if related to UK land.

BUT: Not All Property-Related Services Are Land-Related for VAT
Where the legal service concerns financial issues in a divorce, even if UK land is part of the asset pool, the primary service may still be classified as general legal advice or representation rather than a service directly connected with land.

🔍 HMRC VAT Notice 741A (Section 7) – Land-Related Services
HMRC defines “land-related” services strictly. To qualify as land-related (and therefore standard-rated for UK land):

The service must be legally required to be carried out on or to affect the land.

The land must be the primary object of the service, not incidental.

So, dealing with financial arrangements in a divorce, even if UK land is involved, may not necessarily be land-related unless you are performing a conveyancing or title transfer role.

🔍 HMRC VAT Notice 741A (Section 7) – Land-Related Services
HMRC defines “land-related” services strictly. To qualify as land-related (and therefore standard-rated for UK land):

The service must be legally required to be carried out on or to affect the land.

The land must be the primary object of the service, not incidental.

So, dealing with financial arrangements in a divorce, even if UK land is involved, may not necessarily be land-related unless you are performing a conveyancing or title transfer role.

✅ So What’s the Answer in Your Scenario?
Work Type VAT Treatment
Divorce proceedings ✅ Outside Scope (OOSUKVAT)
Financial settlement involving UK property ⚠️ Likely OOSUKVAT, unless land is the primary focus
Conveyancing / property transfer 🔴 Standard-rated (20%) VAT

If you’re advising on the financial settlement, and the property is one of many assets, it is likely not land-related for VAT — so OOSUKVAT still applies.

If you are handling the actual sale or transfer of title, or giving specific legal advice on the land itself, then standard-rated VAT applies.

Hope this helps

[Author]

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