Nature of supply

Exemption for leasing or letting of immovable property

Fortyseven Park Street sold ‘fractional interests’ in apartments at 47 Park Street in Mayfair London. The interest gave the buyer the right to occupy a residence in the property for a specified number of nights in each year until 31 October 2050 as set out in the membership agreement. Buyers could exchange stays in the apartment for stays at other properties. They paid an annual fee that covered a range of property management costs but extras such as room service and deliveries could be bought for an additional charge.

The taxpayer said it provided exempt licences to occupy land (VATA 1994 Sch 9 group 1 item 1). HMRC disagreed saying buyers did not acquire any right to occupy a residence as owner only an opportunity to occupy a residence.

The First-tier Tribunal dismissed the taxpayer’s...