VAT and Fund Managers

The VAT exemption for financial services has been the subject of dispute for many years. In recent years fund management has been at the forefront. First there were the Prudential Assurance Co Ltd and Abbey National plc cases which extended the exemption to the investment management of UK open-ended investment companies (OEICs) and authorised unit trusts. Then in 2006 a further Abbey National case extended the exemption to services provided by third-party administrators. Last year the ECJ decided in the case of JP Morgan Fleming Claverhouse Case C- 363/05 that investment trusts were 'special investment funds' for the purposes of the VAT exemption in Article 13B(d)(6) (now Article...