United Kingdom Supreme Court Posts Judgment Clarifying VAT Treatment of Property Sales Under Option-to-Tax Rules

The United Kingdom Supreme Court May 23 posted online a judgment in Case No. UKSC/2021/0216, on the VAT treatment of property sales under option-to-tax rules. The taxpayer, a property owner, opted to tax a commercial property, but ultimately sold it without charging VAT, arguing that the specified exception pertaining to developers of exempt land disapplied the option to tax. The Tax Agency assessed VAT, treating the sale as taxable. The First-tier Tribunal, Upper Tribunal, and Court of Session Inner House dismissed the taxpayer’s appeal. On a further appeal, the Supreme Court found that: 1) the capital item test couldn’t be ...