Darren and Lynn Hills v HMRC

In Darren and Lynn Hills v HMRC (TC03770 – 2 July 2014) the FTT found that a property was subject to an option to tax.

Mr and Mrs Hills were the buyers of a freehold property and the issue was whether VAT should have been charged on the sale.

Mr and Mrs Patel had used a self-invested personal pension plan (SIPP) to purchase the property in 2003. Mr Patel died in September 2010 and the sale by the trustees of the SIPP to the appellants was agreed shortly thereafter in December 2011.

In July 2010 the trustees of the SIPP had written to HMRC to make a ‘belated notification of option to tax’ (VATA 1994 sch 10).

The Hills argued that the election had no application as it had not been made by Mrs Patel who was the beneficiary (sch 10 para 40). However the FTT found...