GLOSSARY
Stamp duty definition
What does Stamp duty mean?
A transfer tax payable on documents and instruments, rather than in respect of a transaction. It is most commonly encountered on the transfer of UK certificated shares, where the stock transfer form is the instrument that is stamped.
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Real estate—United Kingdom - England & Wales—Q&A guide
Real estate—United Kingdom - England & Wales—Q&A guide This Practice Note contains a jurisdiction-specific Q&A guide to real estate in United Kingdom - England & Wales published as part of the Lexology Getting the Deal Through series by Law Business Research (published: January 2022). Authors: Fried Frank Harris Shriver & Jacobson LLP—Patrick Williams; Jons F. Lehmann; Devina Rana 1. How would you explain your jurisdiction’s legal system to an investor? England and Wales have a common law legal system. Investing in England and Wales is highly favoured given its system of compulsory land registration and just legal system. The laws governing real estate are predominantly statute based, and these are constantly developed through case law. International law is relevant to a limited extent (eg, matters concerning merger control are dealt with by international treaties that the United Kingdom is a part of). It is unclear how Brexit will impact this. In England and Wales, land contracts need to be in writing, to incorporate all relevant terms of sale, and to be signed by both seller and buyer. Oral contracts for the sale of land are usually unenforceable. Contracts for land are 'exchanged', with the legal transfer of ownership taking place on completion of either a deed of transfer or grant of a lease. 2. Does your jurisdiction have a system for registration or recording of ownership, leasehold and security interests in real
Tax incentives for companies investing in AIM companies
Tax incentives for companies investing in AIM companies A few tax incentives are available to companies investing in unlisted shares and securities such as shares admitted to trading on AIM. AIM is one of the markets owned and operated by the London Stock Exchange (LSE) and is aimed at small, mid-cap and growing companies. Although shares and securities traded on AIM are colloquially referred to as 'listed on AIM', they are in fact not listed, but rather admitted to trading on AIM. If a company has shares or securities admitted to trading on AIM and it has no other shares or securities that are listed on a recognised stock exchange, the company is an unquoted company. This Practice Note contains a table outlining the key tax incentives available to companies that invest in unlisted higher-risk companies. For information on the tax incentives available for individuals, and the policy behind such reliefs, see Practice Note: Tax incentives for individuals investing in AIM companies. In this Practice Note: • AIM refers to the AIM market of the London Stock Exchange, and • AIM shares refers to unlisted shares admitted to trading on AIM Table summarising key investor tax reliefs for companies investing in AIM shares Tax relief Relevance to AIM Maximum relief Who can claim and how to claim? Share loss relief: enables an investment company that realises
Client account procedures and records 2019—law firms
Client account procedures and records 2019—law firms This Practice Note sets out the requirements of the SRA Accounts Rules 2019, in force from 25 November 2019, regarding client accounting procedures and records. It also reflects supporting guidance issued by the SRA: Helping you keep accurate client accounting records. The 2019 Rules form part of the SRA Standards and Regulations. They focus on the key principles of: • keeping client money separate from the firm’s money • returning client money promptly at the end of a matter • only using client money for its intended purpose • proportionate requirements for firms to obtain accountants’ reports The Accounts Rules 2019 (2019 Rules) are much more concise than the Accounts Rules 2011 (2011 Rules), comprising just over six pages of rules plus a three-page glossary. This does mean a lot of detail is lost, but some of this has been incorporated into the supporting guidance. Generally, however, the 2019 Rules are written in clear language that is easy to understand. See also Precedents: Accounts manual for staff—law firms 2019 and Accounts manual for accounts or finance team—law firms 2019. Terminology The 2019 Rules are littered with subjective terms such as ‘promptly’, ‘fair’ and ‘appropriate’. The SRA acknowledges that this requires an exercise of judgment, which requires an adjustment for many firms compared to the detailed and prescriptive 2011 Rules. However, the SRA did not consider
Islamic finance standard documentation in the context of real estate finance transactions
Islamic finance standard documentation in the context of real estate finance transactions Islamic real estate finance is becoming ever more popular and increasingly mainstream in the UK and world property markets. Global assets of Islamic finance are estimated to be around $US 2.05 trillion, with Islamic banking contributing to 71% of that total. This has been and will continue to be fueled by developments at home and abroad, with shifting demographic trends, rising income levels, increased investment outside the Gulf Co-operation Council by Middle Eastern investors, strong investment returns in the Halal, infrastructure, and Sukuk bond sectors and the UK is well positioned to continue to reap the benefits of this ever expanding market. In addition, non-Islamic market participants are increasingly looking to Islamic financing structures to supplement conventional equity and debt funding. The purpose of this Practice Note is to explore in some detail the main Islamic real estate finance structures: • Ijarah • diminishing Musharaka and • commodity Murabaha, focusing on the documentation required for each structure and the legal, tax and regulatory issues which underpin them in the UK. This Practice Note will also touch upon the principles and practicalities involved in Islamic real estate investment in the context of UK real estate transactions. Ijarah Ijarah, literally ‘leasing’, is a structure commonly used in the UK residential property market. Under this structure, the bank buys the property from the seller and
Private M&A—Malaysia—Q&A guide
Private M&A—Malaysia—Q&A guide This Practice Note contains a jurisdiction-specific Q&A guide to private manda in Malaysia published as part of the Lexology Getting the Deal Through series by Law Business Research (published: October 2021). Authors: Foong and Partners—Dato’ Foong Chee Meng; Tan Chien Li; Khor Wei Min; Vivian Chew Li Voon 1. How are acquisitions and disposals of privately owned companies, businesses or assets structured in your jurisdiction? What might a typical transaction process involve and how long does it usually take? An acquisition is commonly structured by way of: • an acquisition of shares in a company; or • an acquisition of a business or assets from a company. Typically, the process for an acquisition involves: • execution of preliminary agreements (eg, a memorandum of understanding, exclusivity agreement and confidentiality agreement) outlining the parties' understanding and principal terms of the transaction); • conduct of legal, financial and tax due diligence exercises by the buyer on the target company; • drafting and negotiation of definitive transaction documents; • execution of definitive transaction documents; and • satisfaction of conditions precedent and in some cases, an updated due diligence and completion of the acquisition. In general, an acquisition may take three to six months to complete. Notwithstanding, the length of time required to complete an acquisition may vary depending on factors such as the size of the target company, complexity of the transaction and time taken for the fulfilment
Scotland: Coronavirus (COVID-19)—commencement and expiry of temporary government support measures
Scotland: Coronavirus (COVID-19)—commencement and expiry of temporary government support measures The table below shows the expiry of various support measures as applicable to Scotland (as part of the UK or in its own right, as indicated by the last column). September 2021 Date Event Scope 30 September 2021 Temporary restrictions on winding-up petitions and statutory demands expire and are replaced by new measures from 1 October 2021 (see below).See Practice Note: Corporate Insolvency and Governance Act 2020—temporary changes to corporate statutory demands and winding-up petitions [Archived], Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of Relevant Period) (No. 2) Regulations, SI 2021/718 and Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10) (No. 2) Regulations 2021, SI 2021/1091. UK 30 September 2021 Expiry of the provision allowing more than one moratorium on diligence in any 12-month period.See Coronavirus (Extension and Expiry) (Scotland) Act 2021 Scotland 30 September 2021 The relaxation of eligibility criteria for companies applying for a moratorium expires (Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2021, SI 2021/375). UK 30 September 2021 Coronavirus Job Retention Scheme ends.See Practice Note: Coronavirus Job Retention Scheme (extended version 1 May to 30 September 2021) [Archived]. UK 30 September 2021 End of the reduced 5% rate of VAT applies to supplies of:• eat-in or hot takeaway food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises in
Tax controversy—Austria—Q&A guide
Tax controversy—Austria—Q&A guide This Practice Note contains a jurisdiction-specific Q&A guide to tax controversy in Austria published as part of the Lexology Getting the Deal Through series by Law Business Research (published: May 2021). Authors: bpv Hügel Rechtsanwälte GmbH—Gerald Schachner; Kornelia Wittmann; Nicolas D Wolski; Lucas Hora 1. What is the relevant legislation relating to tax administration and controversies? Other than legislation, are there other binding rules for taxpayers and the tax authority? The Austrian tax authorities must apply Austrian statutory tax law (including EU directives that have been transposed into national law) as well as constitutional law and directly applicable EU law. Bilateral double taxation conventions are transposed to national tax law by parliament and are, as such, directly applicable. Ministry of Finance regulations serve to substantiate the law, and within the boundaries provided by the law are also binding for all taxpayers and the courts. In contrast, guidelines or ordinances issued by the Ministry of Finance are binding only for the tax authorities themselves, and not for the taxpayer or the courts. Such guidelines provide explanations and interpretations of Austrian tax law and are intended to harmonise interpretations of the tax law. If a taxpayer relies on these guidelines or ordinances, he or she can expect protection of his or her good faith under certain conditions. Case law of the European Court of Justice and the domestic courts is
Banking & Finance—checklists and flowcharts
Banking & Finance—checklists and flowcharts Key developments and horizon scanning Title Mini summary LIBOR transition quick guide—drafting a risk-free rate facility agreement: checklist This Checklist sets out in table form points to consider when drafting or amending a facility agreement to be based on a risk-free rate (RFR) such as SONIA. It sets out what is meant by the various provisions, includes points to consider and contains drafting tips. Coronavirus (COVID-19)—checklist for financial services firms This Checklist is authored by Clifford Chance lawyers from across their offices in Asia, the UK, Continental Europe and the US, and was first published by Clifford Chance on 12 March 2020. It sets out regulatory considerations as a starting point for regulated financial services firms, including impacts on financial contracts, regulatory requirements and expectations around business continuity planning and operational resilience. Remote execution of documents resources—checklist This Checklist of resources sets out some of the considerations for remote execution of documents when parties are not able to meet in person because of social distancing and self-isolation as a result of coronavirus (COVID-19). Coronavirus (COVID-19) and contractual obligations—checklist This Checklist sets out some of the key issues to consider when a party is unable to comply with its contractual obligations due to the impact of coronavirus (COVID-19), including force majeure. Retained EU law—flowchart This Flowchart outlines some of the key points to consider when looking
Slovenia—cross border banking and finance guide
Slovenia—cross border banking and finance guide Coronavirus (COVID-19): Existing financings/utilised debt Does debt documentation in your jurisdiction typically foresee termination rights for the lender upon the occurrence of a crisis? If so, are eg customary material adverse effect (MAC) provisions enforceable in such instance? Generally, yes. In addition to ‘LMA style’ precedents—which will contain a variation of the recommended MAC form—also ‘local form’ bank loan agreements typically foresee termination/acceleration/commitment cancelation rights in case of material adverse changes. In the case of ‘local form’ documents, MAC provisions tend to be phrased more broadly than the LMA precedent—most notably, sometimes referring to circumstances not affecting the borrower directly (eg general adverse movements in the economy)—but are, more often than not, linked to the borrower's ability to comply with the loan agreement. That said, the enforceability of MAC provisions—especially if formulated broadly/exercised by reference to circumstances external to the specific borrower—may have its limits and will need to be assessed on a case-by-case basis. In principle, lenders will be able to rely on MAC provisions where termination/acceleration is justifiable due to borrower-specific circumstances. On the other hand, it is not a given that MAC clauses can be enforced due to the occurrence of a crisis per se. Limited case law related to rebus sic stantibus/force majeure scenarios would appear to lean in favour of a specific-case-based approach and require that the
Guide to insolvency in the care home industry
Guide to insolvency in the care home industry This Practice Note gives guidance on taking enforcement action in the care home industry. It includes insight into common care home ownership structures and ways to structure a sale of an insolvent care home business around potential regulatory issues. It also includes some points to consider when drafting a sale agreement relating to an insolvent care home business. The enforcement and sale process for distressed care homes can be a long road with various pitfalls. While this Practice Note highlights some of the key areas that will need to be considered, every case will have its own unique issues. Insolvency and the care home industry—overview Care homes offer accommodation and personal care for people who may not be able to live independently. Some care homes also offer care from qualified nurses or specialise in caring for particular groups such as younger adults with learning disabilities. The care home industry had suffered greatly in the past few years. Insolvency Service statistics recorded 31 insolvencies in the calendar year 2010 rising to 71 in 2016. In 2017 there was a significant increase with 123 insolvencies in that year alone and in 2018 the number of insolvencies in the first three quarters of the year have already outstripped the total number for 2016, appearing to confirm that the problems of this troubled sector are
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Tax and taxation definition
Tax or Taxation
Property warranties (short-form) in an asset purchase
Property warranties and definitions to include in a short-form asset purchase agreement 1 Definitions In this Agreement, unless the context otherwise requires: Encumbrance means any mortgage, claim, charge (fixed or floating), pledge, lien, hypothecation, guarantee, right of set-off, trust, assignment, right of first refusal, right of pre-emption, option, restriction or other encumbrance or any legal or equitable third party right or interest including any security interest of any kind or any type of preferential arrangement (or any like agreement or arrangement creating any of the same or having similar effect) and Encumbrances means more than one of them; Freehold Properties means the freehold properties, described in Part [insert number] of Schedule [insert number] and Freehold Property means any one of them; Lease means the lease and any supplemental documents under which any Leasehold Property is held, further details of which are set out in Part [insert number] of Schedule [insert number] and Leases means more than one of them; Leasehold Properties means the leasehold properties described in Part [insert number] of Schedule [insert number] and Leasehold Property means any one of them; Properties means the Freehold Properties and the Leasehold Properties described in the Schedule [insert number] and the Property means any one of
EMI share option scheme rules
EMI share option scheme rules Rules of the [insert name of company granting EMI options] enterprise management incentives Scheme 1 Definitions and interpretation 1.1 Definitions In this Scheme, except where the context otherwise requires, the words and expressions set out below will bear the following meanings, namely: Acquiring Company • has the meaning ascribed to it in paragraph 39 of Schedule 5; Agreement • means the agreement entered into by an Eligible Employee, the Company and, where different, the person which grants an Option, in such form as the Directors will from time to time determine; Closed Period • means a period when the Directors are prohibited from dealing in shares under the Market Abuse Regulation (Retained Regulation (EU) 596/2014) or any other regulation, act, guidance or code on transactions in securities which applies to the Company, including any share dealing code of the Company; Committed Time • has the meaning given in paragraph 26 of Schedule 5; Company • [name of company granting options] (Company No [insert registered number]); Control • has the meaning ascribed to it in Schedule 5 and derivative terms shall be construed accordingly; Date of Grant • in respect of the Option, means the date on which the Agreement is entered into by all the relevant parties; Directors • means the board of directors of the Company from time to time or a duly authorised committee of such directors; Disqualifying Event • means the first to occur of an
Share purchase agreement—pro-buyer—corporate seller—conditional—long form
Share purchase agreement—pro-buyer—corporate seller—conditional—long form This Agreement is made on [insert day and month] 20[insert year] Parties 1 [Insert name of selling corporate entity] incorporated in [England and Wales OR [insert country of incorporation] OR with registered number [insert company number] whose registered office is at [insert address] (the Seller); 2 [Insert name of purchasing corporate entity] incorporated in England and Wales OR [insert country of incorporation] OR with registered number [insert company number] whose registered office is at [insert address] (the Buyer), and 3 [Insert name of guarantor entity] incorporated in England and Wales OR [insert country of incorporation]] with registered number [insert company number] whose registered office is at [insert address] (the Guarantor) [(each of the Seller, the Buyer and the Guarantor being a Party and together the Seller, the Buyer and the Guarantor are the Parties).] Background (A) The Company (as defined below) is a private company limited by shares and is incorporated in [England and Wales OR [insert country of incorporation]]. Details of the Company are set out in Schedule 1. (B) The Seller is the legal and beneficial owner of the Sale Shares (as defined below), being in aggregate the entire allotted and issued share capital of the Company. (C) The Seller has agreed to sell and the Buyer has agreed to purchase the Sale Shares on the terms of this Agreement. (D) The Guarantor
Transfer of part by way of exchange
Transfer of part by way of exchange Precedent transfer Exchanges are now almost invariably effected by separate transfers, each containing the usual title guarantees given by ordinary sellers. There is no restriction on the nature or value of the properties exchanged. A freehold interest can validly be exchanged for a leasehold interest (IRC v Littlewoods Mail Order Stores [1962] 2 All ER 279, HL) and any necessary payment can be included by way of equality of exchange. An adaptable Word version of the precedent form TP1 can be downloaded, saved or printed from the link on this page. Drafting notes to precedent transfer Panel 1—Title numbers If there are a number of properties, each title number should be listed alphanumerically and may be numbered starting with one, and each property listed in the same order as the title numbers and correspondingly numbered. Panel 3—Property description The optional wording is for use where the Property is unregistered. Where a plan accompanies the transfer, HM Land Registry requires detailed rules relating to the plan to be followed, otherwise the application for registration will be rejected. The rules are set out in HM Land Registry Practice Guide 40. HM Land Registry will reject plans that have not been signed by the parties. The rules provide for this in the case of a dealing with part of the land in a registered title and it is good
Share purchase agreement—pro-buyer—individual sellers—conditional—long form
Share purchase agreement—pro-buyer—individual sellers—conditional—long form This Agreement is made on [insert day and month] 20[insert year] Parties 1 The several persons whose names and addresses are set out in Schedule 1 (together the Sellers), and 2 [Insert name of purchasing corporate entity] incorporated in [England and Wales OR [Insert country of incorporation]] with registered number [insert company number] whose registered office is at [insert address] (the Buyer), [(each of the Sellers and the Buyer being a Party and together the Sellers and the Buyer are the Parties).] Background (A) The Company (as defined below) is a private company limited by shares and is incorporated in[ England and Wales OR [insert country of incorporation]]. Details of the Company are set out in Schedule 2, Part A. (B) The Sellers are the legal and beneficial owners of the Sale Shares (as defined below), being in aggregate the entire allotted and issued share capital of the Company. (C) The Sellers have agreed to sell and the Buyer has agreed to purchase the Sale Shares on the terms of this Agreement. The parties agree: 1 Definitions and interpretation 1.1 In this Agreement[ unless the context otherwise requires]: Accounts • means the audited accounts of[ the Company OR each Group Company and the audited consolidated accounts of the Group] [ for the accounting reference period ended on the Accounts Date OR for each of the last [insert number] consecutive accounting
Report on title—long form
Report on title—long form Property: [insert name and/or address of the Property] (‘Property’) Purchaser: [insert name, address and (if applicable) company registration number of buyer] Transaction: [insert brief details] 1 Executive summary 1.1 Scope of report This report is addressed to you [insert buyer’s name] and has been prepared for your sole benefit in connection with your proposed acquisition of the Property. This report may not be disclosed to or relied upon by any other party without our prior written consent. 1.2 [ Good and marketable title We are of the opinion that, subject to the matters referred to in this report, upon completion of the purchase of the Property, payment of [stamp duty land tax OR land transaction tax] and registration at HM Land Registry, you will obtain a good and marketable title to the Property.] 1.3 Areas of concern [Insert any concerns about the Property arising from your due diligence]. [Title indemnity insurance [has been OR will be] obtained in respect of [insert details of title defect which has been/will be insured against]. The indemnity insurance policy provides cover up to a maximum of £[insert amount] for a period of [insert period of cover] against [insert risks covered].] [[Insert any other relevant information and advice about the policy.]] 2 Transaction summary and key terms [You have informed us that this is an investment purchase and this report is based on the assumption that you will continue to use
Recognising crime—red flags and warning signs for staff—law firms
Recognising crime—red flags and warning signs for staff—law firms You must remain alert to the red flags and warning signs of crime potentially taking place in our organisation. While you do not have to behave like a police officer, you must make the sort of enquiries that a reasonable person (with the same qualifications, knowledge and experience as you) would make. This awareness tool identifies typical red flags and warning signs that may indicate that our firm is involved in or is itself being used to commit crime (eg money laundering, terrorist financing, bribery, corruption, property or mortgage fraud or organised crime). These factors do not automatically mean that crime is taking place, but you should be aware of them and pay particular attention to matters where a number of factors are present. These red flags and warning signs would normally require further investigation. Methods for committing crime change all the time. We have set out below typical general red flags and warning signs, broken down into three categories: (1) the client, (2) the money, (3) the transaction and then signs to look out for in specific areas of work. The lists are not exhaustive. 1 The client Red flags and warning signs in relation to the client include where the client: —is excessively obstructive or secretive; —is a politically exposed person (PEP); —uses an intermediary, or does not appear to be
Transfer of part
Transfer of part Precedent transfer An adaptable Word version of the precedent form TP1 can be downloaded, saved or printed from this link: Drafting notes to precedent transfer Panel 1—Title numbers If there are a number of properties, each title number should be listed alphanumerically and may be numbered starting with one, and each property listed in the same order as the title numbers and correspondingly numbered. Use form TR5 if there is a substantial number of registered titles. Panel 3—Property description The optional wording is for use where the Property is unregistered. Where a plan accompanies the transfer, HM Land Registry’s detailed rules relating to plans must be followed, otherwise the application for registration will be rejected. The rules are set out in HM Land Registry Practice Guide 40. HM Land Registry will reject plans that have not been signed by the parties. The rules provide for this in the case of a dealing with part of the land in a registered title and it is good practice in any event – to ensure that the seller and the buyer have approved the extent of the property. Where a plan is not sufficient to allow clear identification of the land, HM Land Registry may ask for an additional plan to be lodged. HM Land Registry guidance confirms that it will treat the plan as though it was attached to the application
Property warranties (long form) in an asset purchase—buyer’s versionBuyer-friendly property warranties and definitions to include in a long-form asset purchase agreement
Definitions In this Agreement, unless the context otherwise requires: 1 [Certificate(s) of Title means the certificate[s] of title in the agreed form marked 'A' relating to each of the Properties, given at Completion by the Seller's Solicitors and addressed to the Buyer [and [insert the names of any other persons who are to receive the benefit of these certificates]];] Encumbrance means any mortgage, claim, charge (fixed or floating), pledge, lien, hypothecation, guarantee, right of set-off, trust, assignment, right of first refusal, right of pre-emption, option, restriction or other encumbrance or any legal or equitable third party right or interest including any security interest of any kind or any type of preferential arrangement (or any like agreement or arrangement creating any of the same or having similar effect) and Encumbrances means more than one of them; Freehold Properties means the freehold properties, described in Part [insert number] of Schedule [insert number] and Freehold Property means any one of them; Lease means the lease and any supplemental documents under which any Leasehold Property is held, further details of which are set out in Part [insert number] of Schedule [insert number] and Leases means more than one of them; Leasehold Properties means
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A married couple, H and W, died within a few months of each other, H dying first. They had made mirror Wills which provided that the residue of each estate would pass to children and adult grandchildren. Is it possible for the beneficiaries of H’s estate to enter into a deed of variation to pass H’s entire estate to W and thereby reduce the inheritance tax charge on H’s estate? If so, to what extent can W’s personal representatives claim any available nil rate band and/or transferable nil rate band?
A married couple, H and W, died within a few months of each other, H dying first. They had made mirror Wills which provided that the residue of each estate would pass to children and adult grandchildren. Is it possible for the beneficiaries of H’s estate to enter into a deed of variation to pass H’s entire estate to W and thereby reduce the inheritance tax charge on H’s estate? If so, to what extent can W’s personal representatives claim any available nil rate band and/or transferable nil rate band? The original legatees of the estate may vary any dispositions made in their favour under the Will of a deceased person or the intestacy rules applicable to the deceased person’s estate. If the conditions set out in section 142 of the Inheritance Tax Act 1984 (IHTA 1984) are met, the replacement legatees specified in the variation will be treated for inheritance tax (IHT) purposes as having directly received the legacy from the deceased at the date of death. Similar reliefs apply for capital gains tax (see section 62(6) of the Taxation of Chargeable Gains Act 1992) and stamp duty land tax (see paragraph 4 of Schedule 3 to the Finance Act 2003). If the original legatees are the children and adult grandchildren who are absolutely entitled to the entire estate of the deceased and the value of
Is there any guidance as to the appropriateness of defining ‘Control’ as either (a) in accordance with section 1124 of the Corporation Tax Act 2010, or as (b) the beneficial ownership of more than 50% of the issued share capital of a company or the legal power to direct or cause the direction of the general management of the company?
Is there any guidance as to the appropriateness of defining ‘Control’ as either (a) in accordance with section 1124 of the Corporation Tax Act 2010, or as (b) the beneficial ownership of more than 50% of the issued share capital of a company or the legal power to direct or cause the direction of the general management of the company? The Drafting Notes to clause: Control definition state: ‘…two options are offered in the suggested definition of the term “control”. The first option is that this term is defined by reference to section 1124 of the Corporation Tax Act 2010; this is a comprehensive, but complex definition. The second option may be more appropriate for straightforward transactions.’ Often in commercial contracts, the term ‘change of control’ is construed by reference to the definition of ‘control’. Therefore, how complex the structure of the parties to the contract, the type of transaction being entered into, the intentions of the parties, the bargaining power of the parties, and the clause within which control is used will be a factor in determining which definition of control is appropriate in the circumstances. Consider also extending the definition of control to expressly capture affiliates, subsidiaries, holding companies or other members of the group, or to more specifically identify particular entities of the group. In which case, see Precedents: Affiliate definition, Subsidiary definition, Group definition,
Where an individual is having a contract to purchase a lease assigned to them by the original purchaser, and the deed of assignment is for a higher price than the original purchase price, will they pay stamp duty land tax on the original purchase price or the higher price in the deed of assignment?
Where an individual is having a contract to purchase a lease assigned to them by the original purchaser, and the deed of assignment is for a higher price than the original purchase price, will they pay stamp duty land tax on the original purchase price or the higher price in the deed of assignment? The Q&A asks what amount of stamp duty land tax (SDLT) is payable on the acquisition of a new lease where the acquisition is in pursuance of an agreement for lease that was assigned to the purchaser. Schedule 2A to the Finance Act 2003 (FA 2003) (transactions entered into before completion of contract) provides the answer. Specifically, FA 2003, Sch 2A, para 4 (assignments of rights: application of rules about completion and consideration) confirms that
Does stamp duty frank any stamp duty reserve tax (SDRT) payable on the same share transfer?
Does stamp duty frank any stamp duty reserve tax (SDRT) payable on the same share transfer? Stamp duty generally applies to transfers of stock and marketable securities for consideration in the form of cash, an assumption of debt or stock/marketable securities. Stamp duty is a tax on documents. Where certificated shares are transferred, the stock transfer form is generally the document subject to stamp duty. For more detail on calculating stamp duty, see Practice Notes: Stamp duty on transfers—consideration and calculation and Stamp duty and SDRT on the sale of certificated registered UK shares. Stamp duty reserve tax (SDRT) applies to agreements to transfer chargeable securities for consideration in money or money’s worth. For more detail on calculating SDRT, see Practice Note: Stamp duty reserve tax on the sale of UK shares held in CREST — Consideration chargeable to SDRT. SDRT is due shortly after an unconditional agreement to transfer chargeable securities is made or a conditional agreement becomes
A council is buying back land by agreement in relation to a possible compulsory purchase order. A seller is being paid the market value of their property as well as compensation in the form of disturbance payments and statutory loss. The seller does not want the amount set out in this way in the transaction documents but wants the full figure reflected in the TR1. How should this be reflected in the TR1, eg should option 1 in panel 8 be used or option 3 (other receipts). By using ‘other receipts’, would this have any effect on the stamp duty land tax payment?
A council is buying back land by agreement in relation to a possible compulsory purchase order. A seller is being paid the market value of their property as well as compensation in the form of disturbance payments and statutory loss. The seller does not want the amount set out in this way in the transaction documents but wants the full figure reflected in the TR1. How should this be reflected in the TR1, eg should option 1 in panel 8 be used or option 3 (other receipts). By using ‘other receipts’, would this have any effect on the stamp duty land tax payment? It is commonly the case that a local authority will seek to negotiate with landowners while a compulsory purchase order is being sought. The general compensatory principle is that the forced seller should be put in an equivalent position meaning that they are no worse off in financial terms after the acquisition than they were before, but also should be no better off. The heads of claim are usually the value of the land taken, any payment for
Where a tenant is granted a lease at a rent and the landlord agrees under a supplemental agreement for the tenant to pay a lower amount than the amount of rent reserved under the lease, is stamp duty land tax paid on the higher or lower amount?
Where a tenant is granted a lease at a rent and the landlord agrees under a supplemental agreement for the tenant to pay a lower amount than the amount of rent reserved under the lease, is stamp duty land tax paid on the higher or lower amount? On the grant of a lease stamp duty land tax (SDLT) is due in respect of the net present value of the rent payable over the term of the lease (and any premium) (sections 55–56 of and Schedule 5 to the Finance Act 2003 (FA 2003)). Rent is not specifically defined
How is SDLT calculated on the assignment of a lease?
How is SDLT calculated on the assignment of a lease? The assignment of a lease is generally treated in the same way as the transfer of a freehold interest and any payment or premium on the assignment (other than a reverse premium) will be subject to stamp duty land tax (SDLT) at the relevant rate. The assumption of the
When does SDLT have to be paid on the grant of a lease, how does a rent free period affect the calculation of SDLT and how is uncertain rent dealt with for SDLT purposes?
When does SDLT have to be paid on the grant of a lease, how does a rent free period affect the calculation of SDLT and how is uncertain rent dealt with for SDLT purposes? It is the duty of the purchaser of UK land to notify HMRC about notifiable land transactions within 30 days after the effective date of the land transaction. The purchaser must also pay any stamp duty land tax (SDLT) due. Where the land transaction is a grant of a lease the tenant is the purchaser for these purposes. For more on the meaning of land transaction and notifiable transaction see Practice Notes: Land transactions, chargeable interests and chargeable transactions and SDLT—notifiable transactions. The effective date is usually the date of completion but it can be earlier if a lease is substantially performed before completion. For more on the
When does the contingency principle apply in respect of stamp duty?
When does the contingency principle apply in respect of stamp duty? As explained in the section, ‘Ascertaining consideration using the contingency principle’ in Practice Note: Stamp duty on transfers—consideration and calculation, the contingency principle for UK stamp duty purposes: • applies where, at the date of the instrument, the amount of consideration is uncertain
What are the tax aspects of a corporate tenant entering into a reversionary lease?
What are the tax aspects of a corporate tenant entering into a reversionary lease? There are various tax aspects to consider when a corporate tenant is granted a reversionary lease including: • Stamp duty land tax (SDLT) • Value added tax (VAT) • Corporation tax on capital gains, and • Capital allowances Some of these tax aspects may not be an
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Property weekly highlights—30 June 2022
This week's edition of Property weekly highlights includes: more on the recent Supreme Court judgment on the Electronic Communications Code, a reminder of the commencement of the Leasehold Reform (Ground Rent) Act 2022 and the Building Safety Act 2022 and release of a new version of CPSE6.
Tax weekly highlights—30 June 2022
This week's edition of Tax weekly highlights includes: (1) new regulations and guidance on remote observation of court and tribunal hearings and (2) HMRC removing Moscow university from the list of R&D qualifying bodies.
Private Client weekly highlights—30 June 2022
This week’s edition of Private Client highlights includes: (1) Companies House’s blog ‘Explaining the secondary legislation for the Register of Overseas Entities—part 1; (2) Lavinia Deborah Osbourne v (1) Persons Unknown (2) Ozone Networks Inc, in which the court granted an injunction over stolen NFTs held on constructive trust; (3) Official Receiver v Obaigbena, which considered the principles governing the disqualification period for directors in insolvency proceedings; (4) Analysis of Royal Commonwealth Society for the Blind v Beasant, which concerned the construction of a legacy determined by reference to the nil rate band; (5) The Department for Work and Pensions’ call for evidence on helping pension scheme members to understand pension choices; (6) Analysis of the Bill of Rights Bill and its implications for human rights in the UK, and (7) Devall v Ministry of Justice, which concerned the systemic and operational duties owed by a public authority to the deceased pursuant to Article 2 and 8 of European Convention on Human Rights.
Property weekly highlights—16 June 2022
This week's edition of Property weekly highlights includes: a White Paper on large-scale reforms to the private rented sector, cases on renewal lease rents, modification of restrictive covenants and SDLT multiple dwellings relief, discussion of contracting-out following refusal of permission to appeal to the Supreme Court in TFS Stores and a consultation on implementation of section 36 of the Equality Act 2010 (duty to make reasonable adjustments to common parts).
Tax weekly highlights—9 June 2022
This week's edition of Tax weekly highlights includes: (i) the EU General Court’s dismissal of the UK’s CFC rules State aid appeal, (ii) publication of the text of a new UK-Luxembourg double tax treaty, not yet in force, and (iii) the FTT decision in Haymarket Media that the sale of a property was not a transfer of a going concern for VAT purposes.
Private Client weekly highlights—9 June 2022
This week’s edition of Private Client highlights includes: (1) Trusts created from 4 June 2022 onwards, will now need to be registered with the Trust Registration Service within 90 days; (2) The Public Guardian v RI and others, in which the Court of Protection decided that a man with a learning disability and chronic schizophrenia lacked capacity in 2009 to execute a LPA; (3) The Law Society reminds UK taxpayers of new CGT payment and reporting deadlines; (4) Revenue & Customs Commissioners v Martino, in which the Upper Tribunal held that staleness is no longer a defence to a discovery assessment; (5) STEP updates its position paper: EU sanctions against trusts with a ‘Russian connection’; (6) The SRA announces new AML requirements, and (7) Italy publishes a decree establishing a register of company beneficial ownership.
FTT considers VAT treatment of transfer of property (Haymarket Media v HMRC)
Tax analysis: In Haymarket Media, the First-tier Tax Tribunal (FTT) found that the sale of a property was not a transfer of a going concern (TOGC) for VAT purposes, because on a true analysis of the transaction, there was not a transfer of a property development business, nor of a property lettings business.
Property weekly highlights—2 June 2022
This week's edition of Property weekly highlights includes: cases on flexible tenancies, modification of restrictive covenants, the debt respite scheme regulations and SDLT group relief and news of delay in implementation of the Renting Homes (Wales) Act 2016.
Tax weekly highlights—2 June 2022
This week's edition of Tax weekly highlights includes: (1) the Chancellor’s announcement on 26 May 2022 about an energy profits levy, (2) the FTT decision in Whispering Smith which applied the Supreme Court decision in Haworth in relation to follower notices and (3) the FTT in Tower One St George Wharf denying SDLT group relief because of tax avoidance.
FTT denies SDLT group relief because of tax avoidance (Tower One St George Wharf v HMRC)
Tax analysis: In Tower One St George Wharf Ltd, the First-Tier Tax Tribunal (FTT) held that the stamp duty land tax (SDLT) was chargeable on the transfer of the lease of a residential property development within a group in circumstances where the transfer was part of a corporation tax scheme.
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