Close equals open

Investment portfolios of JP Morgan Fleming Claverhouse Investment Trust an investment trust company were managed by a third party. JP Morgan was charged VAT on those services and brought proceedings along with the Association of Investment Companies that close-ended funds should be exempt. The VAT tribunal referred the matter to the European Court of Justice for a preliminary ruling asking:

• Could special investment funds in Article 13(B)(d)(6) of the Sixth Directive include close-ended investment funds.
• If so what was the scope of Member States' discretion under the provision?
• Did that article have direct effect?

The European Court of Justice said that special investment funds were not defined in the Sixth Directive. However in Abbey National plc v CCE (Case C-169/04) [2006] STC 1136 it was held that the phrase covered collective investments whatever their...