The Value Added Tax (Finance) Order 2020

Made: 3rd March 2020

Laid before the House of Commons: 4th March 2020

Coming into force: 1st April 2020

The Treasury make the following Order in exercise of the powers conferred by sections 31(2) and 96(9) of the Value Added Tax Act 1994[^f00001].

Citation and commencement

1

This Order may be cited as the Value Added Tax (Finance) Order 2020 and comes into force on 1st April 2020.

Amendment of Group 5 of Schedule 9 to the Value Added Tax Act 1994

2

Group 5[^f00002] of Schedule 9 to the Value Added Tax Act 1994 (exemptions: finance) is amended as follows.

3

In Item 9 insert after paragraph (j)—

; or (k) a qualifying pension fund.

4

In Note (6)—

• (a) in the definition of “closed-ended collective investment undertaking”, in paragraph (a) omit “, wholly or mainly in securities”;

• (b) in the appropriate place insert both—

• “pension member” means, in relation to a qualifying pension fund, a person to or in respect of whom retirement benefits are to be paid from the fund;”;
• ““qualifying pension fund” means a pension fund in relation to which all of the following conditions are satisfied— it is solely funded, whether directly or indirectly, by pension members; the pension members bear the investment risk; the fund contains the pooled contributions of more than one pension member; the risk borne by the pension members is spread over a range of investments; and the fund is established in the United Kingdom or in a member State;

5

After Note (6A) insert—

(6B) For the purposes of Note (6), a pension fund is funded indirectly where contributions are made by a third party on behalf of a pension member.

Signed

Iain Stewart — Rebecca Harris — Two of the Lords Commissioners of Her Majesty’s Treasury — 3rd March 2020

Explanatory note

(This note is not part of the Order)

EXPLANATORY NOTE

This Order amends Group 5 of Schedule 9 to the Value Added Tax Act 1994 (exemptions: finance) to (i) extend exemption to the management of what are termed ‘qualifying pension funds’ and (ii) remove the restriction on the type of assets that a close-ended collective investment undertaking can invest in in order for its management to qualify for exemption.

A Tax Information and Impact Note covering this instrument will be published on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.

Footnotes

[^f00001]: 1994 c. 23.

[^f00002]: Item 9 and Note (6) were substituted by S.I. 2008/2547 and have been amended by S.I. 2013/1402 and 2013/1773; Note (6) was amended by paragraph 81 of Schedule 18 to the Financial Services Act 2012 (c. 21) by virtue of S.I. 2013/423 and Note (6A) was inserted by S.I. 2008/2547. Amendments were to be made to Group 5 of Schedule 9 to the Value Added Tax Act 1994 (‘Group 5’) by S.I. 2019/43 but that S.I. was revoked by S.I. 2019/1014. Paragraph 95(2) of Schedule 8 to the Taxation (Cross-border Trade) Act 2018 (c. 22) makes amendments to Group 5 but these amendments have not yet been commenced.