½Û×ÓÊÓƵ

This paragraph examines the business status of investment activities.

For an overview of VAT and business more broadly, see V2.201B.

Mere investment, ie the acquisition of property, will not in itself constitute an economic activity, even if the holder of the investment can expect to receive income from it. For this well established principle, see the ECJ's judgments in Polysar¹, Harnas & Helm CV² and Wellcome Trust³ (these judgments were all delivered whilst the UK remained an EU member state).

However, if the holder of property exploits it so as to obtain income from it on a continuing basis, it appears they will be regarded as carrying on a business/economic activity⁴. Exploitation of property would appear, in this context, to require that the property is in some way made available to a third party for a consideration, see, for example, Van Tiem⁵ and Rompelman⁶.

The following dictum of Lord Wilberforce in Simmons⁷, when modified as suggested by one tribunal chairman, may be helpful as indicating