The Court of Session has reinstated the First Tier Tribunal (FTT) decision in the case of Sibcas, (CSIH 49) which dealt with the issue of whether the leasing of a temporary building was exempt from VAT. This case has had an unusual gestation. The exemption applicable to land supplies is defined in the VAT Directive, in unintuitive terms, as relating to the leasing of ‘immoveable property’.

In most cases this would appear essentially the same as land, and fixtures to land (such as buildings and civil engineering works). Since we tend to view such structures as a subset of ‘land’, the result is that the leasing of such structures (which fall into the exempt definition) is also the provision of a right to occupy land. But, does the definition of ‘immoveable property’ go wider than an adjunct to land? What happens if you lease an asset without leasing the land?

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