VAT exemption for fund management
Produced in partnership with Martin Shah and Gary Barnett
VAT exemption for fund management

The following Tax practice note produced in partnership with Martin Shah and Gary Barnett provides comprehensive and up to date legal information covering:

  • VAT exemption for fund management
  • The VAT exemption for financial services
  • Why is the exemption for fund management important?
  • The exemption for fund management
  • What is ‘management’?
  • Outsourced management
  • Advice
  • What is a ‘special investment fund as defined by member states’?
  • Pension funds
  • Portfolio management
  • More...

VAT exemption for fund management

FORTHCOMING CHANGE for UK funds: At Budget 2020 the government announced a review of the UK funds regime including the VAT treatment of fund management fees. A general review was launched on 26 January 2021 and closes on 20 April 2021. The commencement of the VAT review has been delayed as a result of revised priorities within HMRC to deal with the consequences of the coronavirus (COVID-19) pandemic and is expected to follow later in 2021. For more detail, see News Analysis: Spring Budget 2020—Tax analysis—VAT on fund management.

The VAT exemption for financial services

The UK VAT exemption for financial services is based on the relevant provisions of Council Directive 2006/112/EC (the VAT Directive). These have been enacted into UK law by Schedule 9, Pt II, group 5 to the Value Added Tax Act 1994 (VATA 1994) which sets out a number of items falling within the exemption.

This Practice Note focuses on the exemptions for services falling within the category of fund management (items 9 and 10 of group 5). The practical application of this exemption is considered in detail in: Practical application of the VAT exemption for fund management.

This Practice Note includes references to EU Directives and case law. The UK ceased to be an EU Member State on 31 January 2020. On this date the UK entered an implementation

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