- The UK Supreme Court unanimously ruled that VAT on adviser fees related to an exempt share sale is not recoverable.
- The Court upheld the “direct and immediate link” test, confirming that such fees are directly linked to the exempt share sale, not to the company’s wider VATable activities.
- The decision rejects previous tribunal approaches that allowed VAT recovery based on the intended use of sale proceeds.
- Arguments based on VAT grouping and the Kretztechnik case were dismissed; intra-group supplies do not change the VAT treatment of share sales.
- The ruling brings finality and narrows the scope for VAT recovery on adviser fees in share sales, focusing on the nature of the transaction rather than its commercial purpose.
Source: natlawreview.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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