Tax cases

Virtual lease

Abbey National owned many leasehold and freehold properties.
It transferred some of the freehold properties to MC Ltd intending to lease back premises that it wished to use. It also assigned its long leasehold interests where the landlord's consent was not required to MC Ltd. With regard to the shorter leases as it would take some time to obtain the landlord's consent in each case and the landlords may be unwilling to consent to the leases being assigned to MC Ltd as it was a new company Abbey National transferred all the economic benefits and burdens of the leases to MC under a virtual assignment.
Abbey National continued to occupy the premises and paid a fee to MC as it would have done in the event of a formal leaseback.
Customs said that the supply by MC to Abbey National under...