Gareth Says – “CHRISTMAS CHEER FOR OUR DISCRETIONARY CLIENTS”

Earlier this year a Discretionary Fund Manager challenged and defeated HMRC on the basis that VAT should not be charged on fees levied.

LGT VESTRA have used this ruling to their advantage.

Their current charge is 0.25% per annum + VAT. The VAT is 20% or 0.05% i.e. a total of 0.3%. LGT applied to HMRC to treat these services as exempt. HMRC have said they have to “self assess” i.e. make up their own minds.

There is a chance that HMRC will overturn the ruling and apply VAT retrospectively, if this happens LGT will indemnify the VAT to that point and pay it on our client’s behalf – so the good news is that the discretionary fee is falling from January 2021 to 0.25%.

Gareth.