VAT briefing for November 2017

Balhousie: self-supply on sale and leaseback

The Upper Tribunal (UT) has allowed HMRC’s appeal in HMRC v Balhousie Holdings Ltd [2017] UKUT 410 (TCC) (reported at page 4) holding that Balhousie was liable to account for VAT on a self-supply that arose as a consequence of the sale of a care home by Balhousie Care (BC) a member of the Balhousie VAT group.

The supply of the care home to BC had been zero-rated under VATA 1994 Sch 8 Group 5 item 1 as the first grant of a residential building. BC funded the construction of the care home by entering into a sale and leaseback. The issue was whether the sale of the care home by BC should be treated as a disposal of its entire interest for the purposes of VATA...