Abbey National Plc v Customs and Excise

Abbey National Plc v Customs and Excise

The court held that the virtual assignment arrangements between Abbey and Mapeley, though not conferring a legal or equitable interest, replicated the essential features of a letting as defined by the Sixth Directive and relevant ECJ case law. The principal fee paid by Abbey to Mapeley was for an exempt supply of leasing or letting of immovable property, not for agency or management services. The Tribunal's contrary conclusion was incorrect. The cross-appeal regarding the treatment of rents under underleases was dismissed, as the statutory trust provisions applied clearly and did not subvert the Directive.

Parties
Appellant: Abbey National PLC; Respondents: The Commissioners of Customs and Excise
Jurisdiction
England and Wales
Judgment Date
06 May 2005
Procedural Posture
Appeal and Cross Appeal From VAT & Duties Tribunal Decision / High Court Judgment
Outcome
Appeal allowed; cross-appeal dismissed.
Legal Topics
Value Added Tax (vat), Exempt Supplies, Leasing or Letting of Immovable Property, Interpretation of Sixth Council Directive, Virtual Assignment, Agency and Property Management Services
Tax Law Commercial Law European Union Law Value Added Tax (vat) Exempt Supplies Leasing or Letting of Immovable Property Interpretation of Sixth Council Directive Virtual Assignment +1 more

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Parties

Abbey National PLC

Appellant

The Commissioners of Customs and Excise

Respondents

Procedural Posture

Appeal and Cross Appeal From VAT & Duties Tribunal Decision / High Court Judgment

Legal Issues

  1. 1 Whether the supply by Mapeley to Abbey under a 'virtual assignment' constitutes an exempt supply of leasing or letting of immovable property under Article 13B(b) of the Sixth Council Directive and UK VAT law, or a standard rated supply of agency and property management services.
  2. 2 Whether rents due to Abbey under underleases, when paid by undertenants to Mapeley, are consideration for standard rated supplies of agency and property management services or for exempt supplies under VAT law.

Ratio Decidendi

The court held that the virtual assignment arrangements between Abbey and Mapeley, though not conferring a legal or equitable interest, replicated the essential features of a letting as defined by the Sixth Directive and relevant ECJ case law. The principal fee paid by Abbey to Mapeley was for an exempt supply of leasing or letting of immovable property, not for agency or management services. The Tribunal's contrary conclusion was incorrect. The cross-appeal regarding the treatment of rents under underleases was dismissed, as the statutory trust provisions applied clearly and did not subvert the Directive.

Court Disposition

Appeal allowed; cross-appeal dismissed.

Orders

  • The appeal by Abbey National PLC is allowed.
  • The cross-appeal by the Commissioners of Customs and Excise is dismissed.