By Staff writer
Three Court of Appeal judges rule that HM Revenue & Customs had pursued the wrong party for the tax
The UK's HM Revenue & Customs has reportedly lost its bid to recover up to £50 million in stamp duty from a Qatar firm from the sale of the Chelsea Barracks in 2007.
Three Court of Appeal judges decided that the tax office had pursued the wrong party for the tax, the BBC reported.
It added that the purchaser, a firm owned by the Qatar Investment Authority, had used a type of Islamic finance that meant a bank actually owned the property.
Project Blue, the investment vehicle ultimately owned by the Qatari ruling family, claimed that HMRC was now out of time to pursue Masraf al Rayan, a Qatar-based bank, the BBC said.
HMRC told the BBC that it was "disappointed" by the ruling.
In the ruling, Lord Justice Lewison said there was "nothing surprising" about which firm HMRC should have pursued for the tax.
Project Blue had used a type of finance that complied with Islamic law, which forbids lending money for interest. It used an arrangement called Ijara.
"Under an Ijara arrangement a bank or other financial institution buys the asset that the customer wishes to acquire and then leases that asset to him," said Lord Justice Lewison in the judgement which added that "it is critical to appreciate that the bank will be the real owner of the asset for the term of the lease, and the customer will not".
Project Blue said in a statement: "We welcome the important clarifications provided by the Court of Appeal. Project Blue Ltd has always fully complied with all UK taxation matters and will continue to do so."