V4.136 Exemption—finance

EU legislation

The exemption extended to financial services is derived from Directive 2006/112/EC, art 135(1)(b)–(g)1, which exempts the following transactions:


    (1)     the granting and the negotiation of credit and the management of credit by the person granting it


    (2)     the negotiation of or any dealings in credit guarantees or any other security for money and the management of credit guarantees by the person who is granting the credit2


    (3)     transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments3, but excluding debt collection4.


    In Target, both the First-tier Tribunal5 and the Upper Tribunal6 considered the meaning of 'current account' in relation to an account which the account holder could only use to make repayments of a debt, ie a loan account.. The First-tier Tribunal considered that:


      •     The term 'current account' is not legally defined but takes its meaning from the commercial world. In that world, a current account would be distinguishable from a loan account.


      •     The key functions of a current account include the ability not only to pay in and draw out funds by

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