VAT has traditionally followed a very mechanistic analysis in relation to a sale and leaseback, in contrast to its direct and stamp tax cousins. But a flurry of recent ‘substance over form’ decisions has challenged that, the latest of which, A Blue UK, does so from a very different perspective – and whilst ironically it shares only ‘form’ in common with the others, it embellishes our understanding of the substance of the other decisions. Unlike the Supreme Court in Balhousie, the FTT in A Blue UK showed no hesitation in co-opting the CJEU decision in Mydibel and found that, because the two limbs of sale and leaseback were so ‘inextricably linked’, they should be looked at in the round as though they were one.
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VAT has traditionally followed a very mechanistic analysis in relation to a sale and leaseback, in contrast to its direct and stamp tax cousins. But a flurry of recent ‘substance over form’ decisions has challenged that, the latest of which, A Blue UK, does so from a very different perspective – and whilst ironically it shares only ‘form’ in common with the others, it embellishes our understanding of the substance of the other decisions. Unlike the Supreme Court in Balhousie, the FTT in A Blue UK showed no hesitation in co-opting the CJEU decision in Mydibel and found that, because the two limbs of sale and leaseback were so ‘inextricably linked’, they should be looked at in the round as though they were one.
If you are not a subscriber, subscribe now to read this content.
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