Intelligent Money Limited v The Commissioners for HMRC

Decision date: 25 February 2022

Neutral citation: [2022] UKFTT 148 (TC)

Overall AI summary confidence: high

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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 fees charged by Intelligent Money for operating its SIPP were VAT-exempt as "insurance or reinsurance." The Tribunal found the SIPP met the domestic Prudential test for life assurance but, applying CJEU authority, held the operator did not assume the financial risk required for an VAT-exempt insurance transaction. The appeal was dismissed and the claimed VAT repayments were not due.

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 to attract the VAT insurance exemption; for the exemption to apply the supplier must in substance assume the financial risk of paying benefits. A trust-based SIPP in which members' contributions are ring-fenced, investments are directed by members or their advisers, and the operator does not bear investment risk does not constitute an insurance transaction for VAT purposes.

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 observed that treating an insurer-operated SIPP differently would not convert a trustee-operated SIPP into an exempt insurance transaction, and commented that HMRC guidance in this area may be outdated and misleading and should be revised. These remarks are ancillary to the decision.

Warning

The chunk contains substantial repetition and duplicated passages of the judgment. Notes contain substantial repetition and duplicated passages; they may not reflect the full judgment text.

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