Fund management
HMRC have set out their view of the current position concerning claims made in respect of VAT charged on fund management services.
The EC VAT Directive (formerly the Sixth Directive) exempts 'management of special investment funds as defined by Member States'. The UK applies this exemption to the management of authorised unit trusts, open-ended investment companies, and trust-based schemes but not to the management of other funds, including investment trust companies.
Fund management
HMRC have set out their view of the current position concerning claims made in respect of VAT charged on fund management services.
The EC VAT Directive (formerly the Sixth Directive) exempts 'management of special investment funds as defined by Member States'. The UK applies this exemption to the management of authorised unit trusts, open-ended investment companies, and trust-based schemes but not to the management of other funds, including investment trust companies.
Recently, the European Court of Justice delivered its judgment in respect of the JP Morgan case as to whether the management of investment trust companies should be VAT exempt. With regard to claims for overpaid VAT on the management of investment trust companies, these have been held over pending the final outcome in the litigation.
Since the judgment, HMRC have received a number of claims for overpaid VAT in respect of the management of other funds not at issue in the litigation. Such claims have generally contained a request that they be held pending the final outcome in the JP Morgan case. HMRC consider that this case does not concern the management of funds other than investment trust companies and that the judgment is clear in that it does not address the issues that arise concerning such other funds. There is thus no basis for HMRC to accept these claims, nor any current litigation against which to justify holding over the claims. Accordingly, HMRC say that they refuse any such claims in respect of the management of funds other than investment trust companies.
Revenue and Customs Brief 58/07, 22 August 2007
