Supreme Court Rules Against Hotel La Tour in Landmark VAT Recovery Appeal on Share Sale Fees

• Hotel La Tour lost its VAT recovery appeal in the UK Supreme Court regarding professional fees from a subsidiary share sale.
• The Supreme Court upheld the Court of Appeal’s decision that VAT on costs linked to exempt supplies (like share sales) is not recoverable, regardless of intended downstream taxable use.
• The Court rejected the argument that future use of funds from an exempt sale could justify VAT recovery, warning this could lead to manipulation.
• The judgment reinforces established VAT principles and brings clarity and certainty to VAT recovery rules in the UK.
• The litigation is now concluded, as the Supreme Court is the final authority on VAT matters.

Source: mercia-group.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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