Restricted use

The taxpayer had kept horses since 1993 at premises in County Down. He applied in 2006 for planning permission for the construction at the address of a facilities manager’s residence.

Permission was granted subject to conditions one of which was that the occupation be limited to a person employed solely by the equestrian business and his or her dependants.

The building was completed in September 2009. The taxpayer and his wife moved in during April the following year. He claimed a VAT refund under VATA 1994 s 35(1A)(a). HMRC refused on the basis the property did not qualify as a result of note 2(c) to group 5 of sch 8 because of the occupancy condition.

The First-tier Tribunal allowed the taxpayer’s appeal. The Revenue appealed.

The Upper Tribunal said it was necessary for the purposes of note 2(c) to decide whether a term of statutory planning consent forbade...