Intelligent Money Limited v The Commissioners for HMRC
Decision date: 25 February 2022
Neutral citation: [2022] UKFTT 338 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerned whether VAT charged on administration fees for the Intelligent Money SIPP was repayable because the supplies were exempt "insurance or reinsurance". The Tribunal accepted that the SIPP met the domestic Prudential test of life assurance but held the operator did not assume the financial risk of benefits and members bore investment risk with funds held in trust. The supplies were therefore not "insurance transactions" for VAT purposes and the repayment claim was dismissed.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The Tribunal's ratio is that meeting the domestic Prudential test for life assurance is not sufficient for VAT exemption: the supplier must assume the financial risk of the insured benefits. Where member contributions are held in identifiable trust funds and members bear investment risk, charges for administration by the SIPP operator are consideration for administrative services, not for bearing insured risk, and so are not VAT-exempt insurance transactions.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal noted that older decisions (such as Winterthur) have limited weight in light of later CJEU jurisprudence, and observed that HMRC guidance on pensions and VAT may be outdated and misleading and could benefit from review; these remarks are non‑binding commentary.