The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked theend of theBrexit transition / implementation period entered into following theUK’s withdrawal from theEU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across theUK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see theBrexit — overview guidance note.
This guidance note provides an overview of theVAT treatment of funded pension schemes.
A funded pension scheme is established either as a personal or company scheme to provide retirement pensions. The company and / or theemployee pay contributions to be invested in thefund during theemployee’s working life. The fund is held with separate trustees who can be individuals or corporate bodies and thepension scheme is normally separate from theemployer’s business.
A defined contribution scheme is one in which contributions (by theemployer and employee) are invested in a fund which is used to buy theemployee a pension on retirement. Thus thelevel of thepension is dependent on thesuccess or otherwise of theunderlying investments. The employee, therefore, bears at least part of therisk of theinvestment.
A defined benefit pension scheme is, by contrast, one within which thepension payable to a retired employee is normally linked to theemployee’s final salary (a final salary scheme). Although theemployee will normally contribute to thecost of thescheme during his period of employment, thepension received on retirement does not relate directly to thecontributions which theemployee has made. The employee therefore does not normally bear any of therisk of theinvestment of thepension fund.
In ATP Pension Services A/S v Skatteministeriet, ECJ Case C-464/12, theCJEU held that a pension fund that
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