(1) GLL BVK International Immobilien Spezialfonds (2) iii-BVK Europa Immobilien Spezialfonds v The Commissioners for HM Revenue and Customs
| Jurisdiction | UK Non-devolved |
| Judge | Judge Richards,Judge Thomas Scott |
| Neutral Citation | [2019] UKUT 0017 (TCC) |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Subject Matter | Tax,23 January 2019 |
| Date | 23 January 2019 |
| Published date | 23 January 2019 |
[2019] UKUT 0017 (TCC)
Appeal numbers: UT/2018/0119
UT/2018/0120
INCOME TAX – claims for repayment of tax paid by German real estate
investment funds under the Non-Resident Landlord scheme – whether
original claim for all income tax or only a proportion – if not, whether claim
could be amended under TMA s114 – application to amend claim under
Rule 5(3)(c) of FTT Rules – whether FTT could direct repayment of a
greater sum than was claimed under TMA s50 or Schedule 1A – appeal
dismissed
UPPER TRIBUNAL
TAX AND CHANCERY CHAMBER
(1) GLL BVK INTERNATIONALER IMMOBILIEN
SPEZIALFONDS
Appellants
(2) iii-BVK EUROPA IMMOBILIEN SPEZIALFONDS
- and -
THE COMMISSIONERS FOR HER MAJESTY’S
REVENUE AND CUSTOMS
Respondents
TRIBUNAL:
JUDGE JONATHAN RICHARDS
JUDGE THOMAS SCOTT
Sitting in public at The Royal Courts of Justice, Strand, London WC2 on 4
December 2018
Nicola Shaw QC for the Appellants
Ravi Mehta and Celia Rooney, counsel, instructed by the General Counsel and
Solicitor to HM Revenue and Customs, for the Respondents
© CROWN COPYRIGHT 2019
DECISION
This is the decision on the appeal by GLL BVK Internationaler Immobilien
Spezialfonds (“GLL”) and iii-BVK Europa Immobilien Spezialfonds (“iii-BVK”)
5
(together “the Appellants”) against the decision of the First-tier Tribunal (“FTT”)
released on 21 May 2018 and reported at [2018] UKFTT 384 (TC) (“the Decision”).
Background
The Appellants are German real estate investment funds. Since their precise
characteristics may be relevant in the ongoing FTT proceedings, and since we had no
10
evidence as to those characteristics, we will simply recite the Appellants’ contentions
as to relevant characteristics without making any findings. As a matter of German law,
it is said that the Appellants have no separate legal personality and they are therefore
managed by separate management companies. At all material times, both Appellants
held interests in UK real estate (the legal title to which was vested in their respective
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management companies) and rent on those properties was paid under deduction of
income tax under the Non-Resident Landlord (“NRL”) scheme. Each of the Appellants
was said to be fiscally transparent.
One of the fifteen ultimate owners of the Appellants was a German pension fund,
Bayerische Architektenversorgung (“Bayerische”). Bayerische held approximately
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14% of iii-BVK and 17% of GLL, through its 100% holding in BARCHV-Masterfund
(“Masterfund”), another German fund which was said to be fiscally transparent. The
other ultimate owners of the Appellants were also German pension funds who also held
interests in the Appellants through separate “masterfunds” that were also said to be
fiscally transparent.
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On 28 February 2014 the Appellants wrote to HMRC claiming repayments of
income tax paid under the NRL scheme for the four years ending 5 April 2010 through
to 2013.
1
HMRC understood the letter of 28 February 2014 to relate only to tax attributable
to the proportionate interest of Bayerische in the Appellants (which we will refer to
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throughout this decision as “Bayerische’s share” of that income tax), and not to tax
attributable to the interests of the other German entities which ultimately owned the
Appellants. They refused the claim on the basis that Bayerische was not registered as
UK tax law required under the Finance Act 2004.
On 4 August 2017 the Appellants appealed to the FTT against HMRC’s refusal, on
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the grounds that it was a breach of the EU principles of equal treatment and the free
movement of capital.
1
In fact, two materially identical letter s were sent. However, neither party suggested that
anything material turns on this fact and for the purposes of this decision, we will refer only to the letter
of 28 February 2014.
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