Exemption ― finance ― fund management

Produced by Tolley
  • (Updated for Budget 2020)
Exemption ― finance ― fund management

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Exemption ― finance ― fund management
  • Management of investments and portfolios, funds, wrapper products and related services
  • What constitutes ‘management’?
  • Management of Property Funds
  • Collective investment undertakings
  • Closed-ended collective investment undertakings
  • Open-ended collective investment schemes
  • Umbrella open-ended CIUs
  • Limitation of exemption to marketed schemes/funds
  • Occupational pension funds
  • More...

This guidance note provides an overview of the VAT treatment of investment fund management services.

Management of investments and portfolios, funds, wrapper products and related services

The management of special investment funds is exempt from VAT. The UK regards the following as special investment funds:

  1. authorised unit trust schemes (AUTS) as defined in Financial Services and Markets Act 2000, s 237(3)

  2. authorised open ended investment companies (OEIC) as defined in Financial Services and Markets Act 2000, s 237(3)

  3. authorised contractual schemes as defined in Financial Services and Markets Act 2000, s 237(3)

  4. a Gibraltar collective investment scheme that is not an umbrella scheme, or a sub-fund of any other Gibraltar collective investment scheme (defined in FSMA 2000, s 264)

  5. an individually recognised overseas scheme that is not an umbrella scheme, or a sub-fund of any other individually recognised overseas scheme (defined in FSMA 2000, s 272)

  6. a recognised collective investment scheme constituted in another EEA state that is not an umbrella scheme, or a sub-fund of any other recognised collective investment scheme constituted in another EEA state (see FSMA 2000, s 264)

  7. (with effect from 1 April 2020) a ‘qualifying pension fund’ (broadly, a pension fund established in the UK or an EU member state, where the contributions to the fund are (a) spread over a range of investments, and (b) made solely by beneficiaries of the fund who bear the investment risk (ie a defined contribution scheme)

  8. a closed-ended collective investment undertaking

2006/112/EC, Article 135 (1)(g); VATA 1994, Sch 9, Part II, Group 5, Items 9–10, note 6; SI 2020/209; VATFIN5000; VAT Notice 701/49: finance; De Voil Indirect Tax Service V4.136, V4.136A–V4.136J; VATFIN5100

The above provisions do not cover a collective investment scheme, or sub-fund, that is not for the time being marketed in the UK if it has never been marketed in the UK or less than 5% of its shares or units are held by, or on behalf of, investors who are in the UK

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