HMRC internal manual

VAT Partial Exemption Guidance

PE73300 - Guidance for specific trade sectors: finance: pension fund trustees

Pension funds will hold investments (usually property, securities etc), which will normally give rise to taxable, exempt and specified supplies. The first stage in any partial exemption method should be to split input tax between property management and investment management. The second stage will be to apply a proxy to each of these sectors to determine the rate of recovery.

N.B. any disposals of units or Open-Ended Investment Company (OEIC) investments will be to the unit trust managers or, in the case of OEICs, the authorised corporate director. Such disposals do not constitute supplies so cannot be included in any partial exemption calculations.