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Case details

Moulsdale t/a Moulsdale Properties (Appellant) v Commissioners for His Majesty’s Revenue and Customs (Respondent) (Scotland)

Case ID: 2021/0216

Case summary

Issue

Whether the taxpayer’s sale of certain property was a supply exempt from value added tax (“VAT”)? More specifically, whether the taxpayer intended or expected that the property sold was or would be a capital item in the hands of the purchaser under Schedule 10 of the VAT Act 1994, resulting in the taxpayer’s option to tax being disapplied?

Facts

Sales of land and buildings are generally exempt from VAT. However, an owner of land and buildings can opt to tax their property so that it then includes VAT. Schedule 10 of the VAT Act 1994 provides for compulsory disapplication of an option to tax in certain circumstances. If the relevant provisions apply, a sale of property where an option to tax has been exercised goes back to being a sale that is VAT exempt.

In 2001, David Moulsdale, trading as Moulsdale Properties (“Moulsdale”) purchased office property. Moulsdale exercised an option to tax over the property. In 2014, Moulsdale sold the property. When Moulsdale sold the property, VAT was not charged. Moulsdale argues he did not charge VAT because Schedule 10 of the VAT Act 1994 meant his option to tax was disapplied and so the sale of the building was VAT exempt. His Majesty’s Revenue and Customs (“HMRC”) disagreed. HMRC’s position was that the option to tax was not disapplied under Schedule 10 of the VAT Act 1994. Accordingly, the sale was not tax exempt and Moulsdale should have accounted for VAT on the sale of the property which HMRC assessed to be £191,562 (plus interest of £11,491).

Judgment appealed

[2021] CSIH 29

Parties

Appellant(s)

David Moulsdale, trading as Moulsdale Properties

Respondent(s)

Commissioners for His Majesty’s Revenue and Customs

Appeal

Justices

Lord Reed, Lord Briggs, Lord Sales, Lord Hamblen, Lady Rose

Hearing start date

17 January 2023

Hearing finish date

17 January 2023

 
Watch hearing
17 January 2023 Morning session Afternoon session
 
 

Future Judgment Update

Please note that appeal in the matter of Moulsdale t/a Moulsdale Properties (Appellant) v Commissioners for His Majesty’s Revenue and Customs (Respondent) (Scotland) has been heard by the Supreme Court and is currently awaiting judgment.

As soon as the judgment hand-down date is confirmed, it will be published on the Future judgments page of this website. As a very broad indication, judgments tend to follow between three to nine months after the conclusion of the appeal hearing, although in some cases it may be earlier than that. Information about judgment hand-downs is usually announced one week in advance. We are unable to give any indication of the likely hand-down date for judgments not listed on the Future judgments page.