RCB/8/15 Deduction of VAT on pension fund management costs
Revenue & Customs Brief, Issue 826 March 2015
Purpose of this Brief
This brief follows on from Revenue and Customs Brief 43 (2014) which set out the position of HM Revenue and Customs (HMRC) following the decision of the Court of Justice of the European Union (CJEU) in C-26/12 Fiscale Eenheid PPG Holdings BV cs te Hoogezand (PPG). That case concerned an employer's entitlement to deduct VAT paid on pension fund management services (ie the administration of the pension and the management of the assets of a fund) in relation to defined benefit (DB) pension schemes.
You can read the full text of the CJEU's decision in PPG on the CURIA website http://curia.europa.eu/.
This brief has been drafted following informal consultation with the pensions industry (including pension lawyers, managers and trustees) and outlines evidence that HMRC accepts meets the requirements outlined in the previous brief in order for employers offering DB pension schemes to achieve VAT deduction in respect of the costs of pension fund management services; in particular it considers the use of tripartite contracts.
This brief only relates to pension fund management services provided in respect of DB schemes. In specific circumstances pension fund management services supplied in respect of defined contribution pension schemes will be VAT exempt following the CJEU decision in C-464/12 ATP Pension Services. Further information on this can be found in Revenue and Customs Brief 44 (2014) (RCB/44/14, Division V16.3).
HMRC has received enquiries in respect of the impact of the