AG’s opinion in Deutsche Bank: fund management

In the Deutsche Bank case, the Advocate General has concluded that discretionary portfolio management should be treated as one composite supply and not two supplies of advice and execution. Having decided there was one composite supply the AG then considered which element defined the nature of the overall service and concluded it is the advisory element that defines the nature of the overall service and that discretionary portfolio management should be treated as taxable. The opinion, if followed by the CJEU, would likely affect the UK VAT treatment since HMRC’s current policy is that where a separate fee is charged for execution services, the income is exempt from VAT.