A misunderstanding

The taxpayer company Grenane Properties Ltd was set up as a special purpose vehicle to acquire property. The company had three directors one of whom M was a partner in the firm of accountants instructed to look after the tax affairs of Grenane.

In June 2006 M as director of Grenane signed a notification form for option to tax land and buildings in relation to the property. The form together with Grenane’s application to register for VAT was sent to HMRC in July 2006.

HMRC requested further information relating to the registration and also sent a property questionnaire. The latter was completed although the proposed use of the property was left blank and returned to the Revenue.

The property was sold in November 2006 to a company which was not VAT registered. No VAT was charged.

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