Kenthouse Properties Limited v The Commissioners for HMRC

Kenthouse Properties Limited v The Commissioners for HMRC

KPL was not entitled to recover input VAT because it did not make, nor clearly intend to make, taxable (zero-rated) supplies of the property. The evidence showed KPL’s intention was to rent out the flats on exempt tenancies, and no major interest sales occurred. The transaction did not qualify as a TOGC, and estoppel or fairness arguments could not override statutory requirements.

Parties
Appellant: Kenthouse Properties Limited; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
31 July 2024
Procedural Posture
Tax Appeal / Judgment After Full Hearing
Outcome
Appeal dismissed
Legal Topics
VAT, Input Tax Credit, Property Acquisition, Exempt and Zero Rated Supplies, Transfer of a Going Concern (togc), Estoppel
Tax Law VAT Input Tax Credit Property Acquisition Exempt and Zero Rated Supplies Transfer of a Going Concern (togc) Estoppel

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Parties

Kenthouse Properties Limited

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / Judgment After Full Hearing

Legal Issues

  1. 1 Whether KPL was entitled to recover input VAT on the purchase of property
  2. 2 Whether the transaction qualified as a TOGC
  3. 3 Whether KPL had the requisite intention to make taxable (zero-rated) supplies

Ratio Decidendi

KPL was not entitled to recover input VAT because it did not make, nor clearly intend to make, taxable (zero-rated) supplies of the property. The evidence showed KPL’s intention was to rent out the flats on exempt tenancies, and no major interest sales occurred. The transaction did not qualify as a TOGC, and estoppel or fairness arguments could not override statutory requirements.

Court Disposition

Appeal dismissed

Orders

  • KPL’s appeal is dismissed.