To fund the development of a new hotel in Milton Keynes, Hotel La Tour Ltd (HLT) decided to sell its existing hotel in Birmingham, by way of the sale of shares in a subsidiary which owned the hotel. HLT sought recovery of the VAT incurred on the marketing and legal costs associated with the sale on the basis that the relevant services were directly and immediately linked to its downstream taxable activities, namely the developing and operating of the new Milton Keynes hotel. The Upper Tribunal agreed with HLT.
Source: deloitte.com
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