VAT issues for private equity funds
Produced in partnership with Emily Clark of Travers Smith

The following Tax practice note produced in partnership with Emily Clark of Travers Smith provides comprehensive and up to date legal information covering:

  • VAT issues for private equity funds
  • VAT treatment of an investment into a limited partnership fund
  • VAT treatment of the transfer of an interest in a limited partnership fund
  • VAT and the general partner
  • VAT on fund management services
  • What is a special investment fund
  • JP Morgan Fleming Claverhouse
  • Wheels Common Investment Fund Trustees
  • ATP Pension Service
  • Fiscale Eenheid X NV
  • More...

VAT issues for private equity funds

This Practice Note looks at VAT issues arising in the context of private equity funds. It considers the VAT implications of dealings between a limited partnership fund and in particular the VAT treatment of:

  1. investments into a limited partnership fund, and

  2. transfers of interests in a limited partnership fund

It also considers whether VAT should be charged on the supply of advice and management services to the fund by analysing the law relating to the VAT exemption for the management of special investment funds.

This Practice Note includes references to EU Directives and case law. For information on the ongoing significance of EU Directives, and of judgments of the Court of Justice following Brexit, see Practice Note: Brexit and tax—the continued application of EU law. Unless otherwise stated, all judgments of the Court of Justice referred to in this Practice Note were decided before the end of the Brexit implementation period.

For details on how an onshore private equity fund is structured, see Practice Note: Taxation of private equity funds—how is a fund structured?

For background information on VAT, see Practice Note: VAT basic principles—overview.

VAT treatment of an investment into a limited partnership fund

A cash commitment to a limited partnership in exchange for units or interests in that partnership is not a supply for VAT purposes.

The leading case is KapHag Renditefonds, where a

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