In HMRC v Weald Leasing Ltd (ECJ Case C-103/09) a company (W) purchased some assets which it leased to another company (S) which in turn leased them to two companies (CM and CA) which were associated with W but were part of a separate VAT group making exempt supplies of insurance. W reclaimed input tax on the purchase of the assets. HMRC formed the opinion that the transactions were an ‘abuse’ and issued assessments to recover some of the input tax which W had reclaimed.
The CA referred the case to the ECJ for a ruling on whether the adoption of an asset leasing structure gave rise to a ‘tax advantage’ within the Halifax principle whether this was an ‘abusive practice’ within the Halifax principle and if it was an ‘abusive practice’ what should be the appropriate redefinition.
The ECJ held that a...
