Supreme Court Rules VAT on Share Sale Costs Not Recoverable, Even for Taxable Business Funding

• The Supreme Court ruled that VAT on professional costs related to a VAT-exempt share disposal is not recoverable, even if the sale funds a taxable business.
• This decision overturns previous tribunal rulings and clarifies that such transaction costs cannot be treated as general business overheads for VAT recovery.
• The Court held that the professional fees had a direct and immediate link to the share sale, not to the taxable business activities.
• There is no general “fundraising exception” allowing VAT recovery based on the use of funds from a share sale.
• The ruling provides clarity for corporate groups on VAT recovery in restructuring and share disposal scenarios.

Source: macfarlanes.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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