The option to tax anti-avoidance rules were drafted widely to catch a broad array of VAT schemes. They co-opt the capital goods scheme as their trigger, and their enforcer. The Court of Session’s decision in D Moulsdale t/a Moulsdale Properties explores what happens when there is no capital goods scheme in the fact pattern: should the anti-avoidance rules switch the option to tax off, or leave it to do its job? The question before the court was how properly to apply the transferee condition. The court held that the option to tax was not disapplied on the sale. The anti-avoidance rules were meant to be applied to the facts at hand once, and not to the rules themselves in perpetuity.
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The option to tax anti-avoidance rules were drafted widely to catch a broad array of VAT schemes. They co-opt the capital goods scheme as their trigger, and their enforcer. The Court of Session’s decision in D Moulsdale t/a Moulsdale Properties explores what happens when there is no capital goods scheme in the fact pattern: should the anti-avoidance rules switch the option to tax off, or leave it to do its job? The question before the court was how properly to apply the transferee condition. The court held that the option to tax was not disapplied on the sale. The anti-avoidance rules were meant to be applied to the facts at hand once, and not to the rules themselves in perpetuity.
If you are not a subscriber, subscribe now to read this content.
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