Fortyseven Park Street – Court of Appeal of England and Wales finds that users of time shares in complex with boutique-hotel level of service were using hotel or similar accommodation

The applicable VAT Directive and the similarly-worded UK VAT legislation provided that an otherwise-exempt supply by way of “leasing or letting of immovable property” was unavailable for “the provision of accommodation … in the hotel sector or in sectors with a similar function.” This exclusion applied to what essentially was a time share arrangement for a property in Mayfair, London that had been converted to 49 residences. The numerous “purchasers,” in consideration for a lump sum, each acquired the right, after making a reservation, to use a residence of the particular quality level (1 to 5) for which they had paid, for up to 21 days a year during the term of approximately 50 years (plus for a further 14 nights on payment of a modest charge). Members, when in occupation, had access to the amenities of a boutique hotel, e.g., concierge, internet room, daily housekeeping.

Newey JA found that the exclusion applied notwithstanding the long-term nature of the rights acquired, stating:

The fact that Membership gives "the flexibility to enjoy short stays of a stated maximum amount each year, in an environment similar to a hotel and with the services which can be expected in a hotel" … was surely something that the FTT [below] could properly take into account in arriving at its assessment.

This decision might be of some assistance in considering what is a hotel for purposes of the ETA definition of residential complex.

Neal Armstrong. Summary of Revenue and Customs v Fortyseven Park Street Ltd, [2019] EWCA Civ 849 under ETA s. 123(1) – residential complex.