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 SIL. The arrangements and documentation showed Sarabande as the direct supplier to artists. Therefore, no exempt supply of land was made to SIL, and the basis for denying input VAT recovery was incorrect. The appeal is allowed.

Citation
[2025] UKFTT 93 (TC)
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, Parent Subsidiary Transactions
Tax Law VAT Input Tax Recovery Exempt Supply Supply of Land Charity Taxation Parent 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 Sarabande is entitled to recover input VAT on acquisition and refurbishment of property
  3. 3 Whether there was a supply of land between Sarabande and SIL in the absence of a written contract

Ratio Decidendi

There was no written contract or sufficient evidence of a supply of land or licence to occupy from Sarabande to SIL. The arrangements and documentation showed Sarabande as the direct supplier to artists. Therefore, no exempt supply of land was made to SIL, and the basis for denying input VAT recovery was incorrect. The appeal is allowed.

Court Disposition

Appeal allowed

Orders

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