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JDI International Leasing v HMRC

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In JDI International Leasing v HMRC (27 June 2018) the UT found that the appellant was not entitled to deduct input tax on the acquisition of tools even though it carried on the taxable activity of supplying spare parts.
JDI is a Cayman Islands company. It acquired highly specialised oilfield drilling tools and intellectual property rights relating to them pursuant to an intra-group reorganisation. JDI leased the tools located in the UK to a Dutch company BHN which subleased them to operating companies in the Baker Hughes group. These in turn made the tools available to third parties.
It was accepted that in order to obtain a deduction for input tax JDI must establish that the VAT it incurred on the supply of the...
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