AIC says tax claims will be complicated.

Investment Adviser, October, 2007

Byline: Fears over complex process and delays following European Court of Justice ruling

Investment companies working to claim VAT refunds could face a series of hurdles, the AIC has warned.

Investment trusts have paid VAT on management fees since 1990, but following a legal challenge the European Court of Justice this June ruled against the tax.

The AIC joined an appeal, launched by JPMorgan Claverhouse Investment Trust, in 2004 against the tax, which open-ended vehicles are exempt from.

It estimated investment trusts pay AGBP40m a year in VAT on management fees, and claimed more than AGBP300m could potentially be clawed back from earlier years.

Investment trusts would need to reclaim the tax from the manager, who would...

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