In Fortyseven Park Ltd v HMRC [2019] EWCA Civ 849 the Court of Appeal has ruled that the sale of a fractional interest in a residential property was subject to VAT. The integral supply of concierge services was not the passive supply of a property landlord but more similar to that of a hotel.

  • 47 Park Street, Mayfair was divided into 49 apartments. 631 fractional interests in these were each sold to allow purchasers to own a share of a residence used at their convenience for 21 days per year with option of extending days..
  • Fractional ownership provides its owners with a number of amenities including a valet service, a 24-hour front desk, a concierge service and tour desk, a business centre, free Wi-Fi, fax and photocopying services, a daily maid service and luggage storage.
  • Other services are available for an extra charge payable to the manager include room service and grocery deliveries, currency exchange, a laundry and dry cleaning service, an in-house florist, a personal shopping service, a car valet and limousine service and newspaper delivery.

The UK's version of the Principal VAT directive exempts "The grant of any interest in or right over land or of any licence to occupy land … other than—…(d) the provision in an hotel, inn, boarding house or similar establishment of sleeping accommodation or of accommodation in rooms which are provided in conjunction with sleeping accommodation or for the purpose of a supply of catering …."

"'Similar establishment' includes premises in which there is provided furnished sleeping accommodation, whether with or without the provision of board or facilities for the preparation of food, which are used by or held out as being suitable for use by visitors or travellers."

In the first appeal, the First Tier Tribunal concluded that the hotel sector exclusion applied and applied the standard rate to the supply. The Upper Tribunal (UT) disagreed and concluded that the extra services were subcontracted.

The Court of Appeal, considered whether there was single of multiple supply and decided that the provision of hotel-type services cannot be regarded as ancillary.  Overturning the UT, it concluded that the sale of fractional interests was standard rated

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Land and property notes

Mixed Supplies? Single or multiple supplies

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Fortyseven Park Ltd v HMRC [2019] EWCA Civ 849