Balhousie Holdings Ltd v HMRC

In Balhousie Holdings Ltd v HMRC [2021] UKSC 11 (31 March 2021) the Supreme Court allowed the taxpayer’s appeal holding that a sale and leaseback was not the disposal of the taxpayer’s ‘entire interest’ in a care home. As a result HMRC was not entitled to claw back the benefit of the VAT zero-rating that had applied when the taxpayer acquired the home from a developer.

Balhousie acquired a recently constructed care home from the developer. The acquisition was zero-rated for VAT purposes under VATA 1994 Sch 8 Group 5 as the first grant by the developer of a building with a ‘relevant residential purpose’ (here a care home). Balhousie financed the acquisition by a sale and leaseback of the building with a finance house.

VATA 1994 provides that a person who acquires a residential building with the benefit of zero-rating will be subject to...

If you are not a subscriber, subscribe now to read this content.

If you are already a subscriber, sign in

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.

Once you have registered, you will receive an email directing you back to read this article in full.