Hotel La Tour: VAT Refunds Denied for Share Sale Costs in Landmark Court of Appeal Ruling

• The Court of Appeal ruled that a taxpayer cannot get VAT back on costs incurred in a VAT-exempt share sale if the proceeds were used for VATable supplies
• VAT on professional costs can only be recovered if incurred in making taxable supplies
• Hotel La Tour tried to claim back VAT on share sale costs for developing a new hotel, but the Court of Appeal denied the refund
• The Tribunals initially agreed with the taxpayer based on a CJEU judgment in SKF, but the Court of Appeal disagreed
• The Court of Appeal found the SKF judgment to be unclear and ultimately interpreted it as an “either-or” test for VAT recovery on costs incurred in share sales

Source: addleshawgoddard.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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