The smoking gun

THE TREATMENT OF property transactions for VAT purposes is inordinately complex and a minefield to navigate for the uninitiated. Case law both domestically and from the European Court of Justice (ECJ) has slowly formed to more clearly lay down the criteria by reference to which land transactions are identified as prima facie exempt and which are taxable. From that starting point the opportunity and actual exercise of the option to tax will then determine the liability of any particular property transaction.
It is impossible in a short article to do justice to a topic on which whole books have been written; accordingly this article will focus on the European and domestic legislation and case law on what constitutes a supply of leasing or letting of immoveable property for VAT purposes. As is illustrated by the case of Abbey National plc [2006] STC 1961 the key...