Exemption for Time Share interests in land

March 2018

Fortyseven Park Street Limited

VAT liability of supply of time share interests in land


The Upper Tier were tasked with deciding whether the supply of 'fractional interests' in accommodation in a boutique London hotel constituted taxable supplies - 'the provision of accommodation in the hotel sector or sectors with a similar function' - or fell within the article 135 exemption for 'the leasing or letting of immoveable property'.

At first glance it might seem straightforward that the supply of timeshare type interests in an hotel were supplies within the hotel sector.

Rejecting the first tier judgment that licensees were effectively prepaying for the right to occupy holiday accommodation and citing amongst other thiings the fact that licensees were able to able to sub-let their interests, the Upper Tier found that the supplies went 'well beyond the provision of accommodation in the hotel sector'.

This is a significant case and may have implications for other supplies within the hotel or serviced accommodation sector possibly impacting on the requirement to use TOMS.


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