What to expect in tax in 2023: VAT perspective

Investment management consultation

The long-awaited VAT and investment management consultation was released on 9 December 2022.

The consultation is modest in its objectives and narrow in scope. The consultation seeks to codify in UK legislation existing EU case law principles defining a special investment fund (SIF) the management of which is VAT-exempt with no discussion of which funds might fall within that definition.

There has long been a debate as to whether certain types of retail products – including certain types of life fund – qualify as SIFs under EU case law principles and the consultation is likely to re-ignite that debate.

The consultation does not address the meaning of ‘management’ and how it applies in the context of outsourcing or the issues which arise where management services are used in relation to both SIFs and non-SIFs. In practice these issues give rise to...