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In Knightsbridge Accountants Ltd v HMRC [2021] TC8026, the First Tier Tribunal (FTT) disallowed input tax claimed on the purchase of a commercial property, there was no evidence to show that the purchaser had legal or beneficial ownership of the property.

'Knightsbridge' provides, among other services, an accountancy and bookkeeping business. It purchased a property for £240,000 plus VAT of £48,000.

Knightsbridge appealed to the FTT.

The FTT found that:

FTT held that Kingsbridge is not therefore entitled to recover input tax on the invoice. The appeal was dismissed.

Comment

This case further highlights the importance of the correct documentation to support an input VAT claim. In the case of a transfer of beneficial ownership, this should be supported by written and properly executed deed.

Useful guides on this topic

Partial exemption & input VAT
How do you calculate the amount of input tax you can recover under the VAT partial exemption rules? What are the de minimis rules?

Joint property: legal v beneficial ownership
What is the difference between legal and beneficial ownership? What are the tax consequences? Are the rules different for married couples?

Land & Property: Non-residential
This guide considers the VAT treatment of the supply of non-residential property.

External links

Knightsbridge Accountants Ltd v HMRC [2021] TC8026


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