Sarabande v Revenue and Customs (VAT, input tax recovery, dispute as to existent of exempt supply of land between parent and subsidiary - no written contract in place - no supply of land identified) [2025] UKFTT 93 (TC) (30 January 2025)

Sarabande v Revenue and Customs (VAT, input tax recovery, dispute as to existent of exempt supply of land between parent and subsidiary - no written contract in place - no supply of land identified) [2025] UKFTT 93 (TC) (30 January 2025)

There was no written contract or sufficient evidence of a supply of land or licence to occupy from Sarabande to Suture Inc Limited. The arrangements and documentation showed Sarabande as the direct supplier to the artists, and the supply was more than a passive letting of land. Therefore, no exempt supply of land was made to SIL, and Sarabande's appeal is allowed.

Citation
[2025] UKFTT 93
Parties
Appellant: Sarabande; Respondents: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
30 January 2025
Procedural Posture
VAT Input Tax Appeal / First Tier Tribunal (tax Chamber) Judgment
Outcome
Appeal allowed
Legal Topics
VAT, Input Tax Recovery, Exempt Supply, Supply of Land, Charity Taxation, Subsidiary Transactions
Tax Law VAT Input Tax Recovery Exempt Supply Supply of Land Charity Taxation Subsidiary Transactions

Case Brief

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Parties

Sarabande

Appellant

The Commissioners for His Majesty's Revenue and Customs

Respondents

Procedural Posture

VAT Input Tax Appeal / First Tier Tribunal (tax Chamber) Judgment

Legal Issues

  1. 1 Whether Sarabande made an exempt supply of land to its subsidiary Suture Inc Limited (SIL)
  2. 2 Whether the absence of a written contract precluded the existence of a supply of land between SB and SIL
  3. 3 Whether Sarabande is entitled to recover input VAT on the acquisition and refurbishment of the property

Ratio Decidendi

There was no written contract or sufficient evidence of a supply of land or licence to occupy from Sarabande to Suture Inc Limited. The arrangements and documentation showed Sarabande as the direct supplier to the artists, and the supply was more than a passive letting of land. Therefore, no exempt supply of land was made to SIL, and Sarabande's appeal is allowed.

Court Disposition

Appeal allowed

Orders

  • HMRC's decision to disallow Sarabande's input tax claim is set aside.