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VAT and Property

Martin Scammell looks at an unfortunate side-effect of the banking crisis
Whatever you think of the banking bailout it seems to have had one consequence that the Government surely did not intend: yet another VAT trap for the property sector. It appears — although it is understood that HMRC are still taking legal advice on this — that if the Government has a majority stake in two banks they are 'connected persons' for the purposes of ICTA 1988 s 839. To a large extent of course it is the banks themselves that need to address the consequences of this. But there is also some fallout for the wider world.
One particular issue concerns the anti-avoidance rule for the option to tax (VATA 1994 Sch 10...
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