Citation and commencement

1.  This Order may be cited as the Value Added Tax (Finance) (EU Exit) Order 2019 and comes into force on exit day(2).

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

2.  Group 5(3) 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 recognised 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 recognised pension fund, a person to or in respect of whom retirement benefits are to be paid from the fund;";

""recognised pension fund" means a pension fund in relation to which all of the following conditions are satisfied-

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.".

EXPLANATORY NOTE

(This note is not part of the Order)

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 ‘recognised 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.

It ensures that the scope of the United Kingdom's exemption for the management of pension funds reflects the scope of the exemption as provided for in European law in accordance with United Kingdom tax policy.

This instrument will be covered by an overarching HMRC impact assessment on VAT and services which will be published and available on the website at https://www.gov.uk/government/collections/customs-vat-and-excise-regulations-leaving-the-eu-with-no-deal.