Place of supply rules and investment services

Wellcome Trust Ltd the sole trustee of the Wellcome Trust received income from investments and some minor activities including sales catering and rental of properties in respect of which it is registered for VAT. Investment income was mainly from overseas investments in relation to which services are supplied to it by investment managers established within and outside the EU.

A dispute arose as to whether the taxpayer was obliged to account for VAT under the reverse charge provisions on the investment management services. The First-tier Tribunal agreeing with the taxpayer found it was not. HMRC appealed but the Upper Tribunal referred the matter the Court of Justice of the EU. It asked whether Article 44 of the VAT Directive must be interpreted as meaning that when a taxable person carrying on a non-economic activity in a business capacity acquires services for the purposes...