Land and Property Flashcards
Describe the case of Languard Homes [2017]
The sale of a converted property (into residential) which was previously mixed use, could not be zero rated.
The UT concluded that HMRC were correct, the zero rating of item 1b can only be applied on the sale of converted residential property if it had previously been entirely non-residential
What is the significance of the Trinity Mirror/Mirror Group PLC case?
Case concerned an anchor tenant where a payment was made by a landlord to an income tenant to take up a new lease which was subject to VAT.
ECJ held that if a tenant had made a supply to the landlord then it could not be an exempt supply, taxable anchor tenancy services.
Any obligations other than to pay rent by the tenant are taxable supplies.
What is the significance of the Rufforth Park Ltd case?
Tribunal held that running a car boot sale in a field on a weekly basis was exempt as a licence to occupy land
What is the significance of the Cantor Fitzgerald case?
The ECJ ruled that a surrender, where a landlord pays a tenant to surrender his lease before the term has expired is exempt from VAT, unless the tenant has opted to tax.
What is the significance of Ridgeons Bulk Ltd?
The waiver of rent was held to be consideration for building work carried out by the tenant and therefore subject to VAT
What is the significance of Lubbock Fine case?
The surrender of a lease in return for compensation paid to the tenant falls within the term ‘letting of immovable property’ and is exempt from VAT.
The tenant is surrendering the lease and returning the immovable property to his immediate landlord
What is the significance of Langstone Housing Association?
A certificate of relevant use to disapply the option cannot be issued retrospectively
What is the significance of Moulesdale?
Applies when the tenant is partially exempt and is connected to the first landlord.
Now need to consider whether the buyer will incur £250k or more on the asset to see if the OTT is disapplied, not just if the asset is a CGS asset for the grantor
Describe the case of Moulesdale
Moulsdale purchased a property in 2001 which was a CGS asset, it was leased to Optical Express and the OTT was disapplied due to the tenants exempt use
The property was then sold to an unconnected purchaser in 2014. The circularity issue arose as MD’s OTT hinged upon whether the the asset was a CGS asset, for the grantor or for the person to whom the property is transferred.
MD did not charge VAT on the sale as he thought his OTT disapplied. He thought it was disapplied because the VAT would make it a CGS asset for the purchaser, thus disapplying the OTT. By not charging VAT on the asset, the asset was not a CGS asset and it meant the OTT stuck, but charging VAT disapplied the OTT as it became a CGS asset.
The way to resolve this was to look at the CGS in respect of the purchaser after the purchase. If they are planning to spend £250k or more on the property, disapplication will be in point.
In Moulsdale there was no expectation that the buyer would spend significant amounts on the property post purchase so Moulsdale had an output tax liability on the sale of the property
Describe the case of Water Property
Concerned whether a phased development came within the scope of the
Acquired and and buildings and the cost of acquiring the building at each stage of the phased development works did not exceed £250,000 but the aggregated total cost did. HMRC considered it a capital item.
The tribunal ruled in favour of the taxpayer, stating that in this case, the development costs for each phase were financed using different means, there were separate contracts in place for each phase and there was no overlap in time between phases.
The property was held not to be a capital item for the capital goods scheme.
What is the significance of Sinclair Collis?
A licence to occupy requires unrestricted access
What is the significance of Abbotsley Golf and Squash Club?
A licence to occupy does not require exclusivity of occupation
