IFM04270 | Property authorised investment funds (PAIFs): process and effects of entry into the PAIF regime: VAT implications

VAT is not chargeable on management fees charged to a PAIF: these services fall within the scope of VAT exemption in Group 5 of Schedule 9 to the VAT Act 1994.

VAT exemption does not extend to services of managing the property rental business of the fund – see VAT notice 742: Land and property. That notice also explains when a PAIF may opt to tax supplies of real property which would otherwise be exempt from VAT.

HMRC’s VAT guidance from VATFIN5000 provides an introduction to these and other VAT issues.