The UT disagreed with HMRC’s analysis and, in essence, endorsed the view of the FTT. It considered that the case-law had evolved since BLP and that BLP alone therefore ceased to accurately reflect the legal status quo. In particular, it now follows from SKF that the ultimate purpose of fundraising needs to be considered not only where the fundraising transaction itself is out of scope, but also where it is a VAT exempt supply (e.g., a sale of shares).SKF instructed the national court to determine whether the costs for the incoming services were likely incorporated in the sale price of the shares. In the UT’s view, this is unlikely to be the case where that price is determined by common share value techniques such as a multiple of earnings or a net asset value.
Source: ey.com