OM Properties Investment Co Ltd v Commissioners for Her Majesty's Revenue and Customs
Decision date: 12 October 2010
Neutral citation: [2010] UKFTT 494 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
OM Properties (landlord) paid building insurance in its own name and recharged tenants; the tribunal considered whether those recharges were an exempt "insurance transaction" under article 13B(a) of the Sixth Directive by reason of a block policy. The tribunal found no contract or position by which OM effected insurance cover for tenants, tenants had no enforceable rights under the policy, and the arrangement did not exhibit the key characteristics of a block policy. The appeal was dismissed.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
Where a landlord procures and pays for an insurance policy in its own name, and tenants merely reimburse premiums without any contractual entitlement to enforce the policy (and the insured under the policy remains the landlord), that arrangement does not amount to the landlord effecting insurance cover for third parties and does not constitute an exempt insurance transaction under the Directive; certificates naming occupants or schedules are insufficient by themselves to establish a block policy.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The tribunal observed that the formal requirement of a "block policy" in prior authorities may have been applied too narrowly and that, in principle, a taxable person who procures cover from an insurer that assumes risk could fall within the exemption even without a traditional block policy; it also cautioned that evidence generated during enquiries (such as broker letters) may be of limited weight in proving substantive contractual arrangements. These observations were not applied to OM's facts.