Hotel Group Barred From Reclaiming VAT on Share-Sale Fees (1)

A hotel group can’t recover the value-added tax on professional fees it incurred during the sale of shares in its subsidiary, the UK Supreme Court ruled unanimously Wednesday.

Hotel La Tour Ltd.’s VAT payments of £76,823 ($102,375) toward professional fees had a direct and immediate link to the share sale in its managed subsidiary Hotel La Tour Birmingham Ltd.—a transaction that is exempt from the tax, the top court said.

The case relates to development of a new hotel in Milton Keynes by Hotel La Tour Ltd., partly financed by the share sale of its managed subsidiary, Hotel ...