What is capital gains tax? When an individual disposes of an asset and makes a profit that is capital in nature, which is not subject to income tax or otherwise taxed, then this may be a taxable capital gain. A number of conditions may affect whether or not a charge to capital gains tax (CGT) arises: • the asset, the disposal and the person making the disposal must all be of a type that can attract CGT • the disposal consideration for the asset must be assessed correctly for CGT purposes • the ‘consideration minus costs’ calculation must result in a gain (see Practice Note: CGT—how to calculate a capital gain) • an exemption or relief may apply • there may be losses to set off against the gain In the UK, a distinction is made between the sale of assets regarded as trading (which may be due to a short period of ownership or where other ‘badges of trade’ exist), where the profit is subject to income tax, and the sale of assets regarded

The UK does not have a specific wealth tax. However capital assets owned at death and some lifetime gifts or transfers, as well as some trust interests, are subject to IHT. For a UK domiciled individual (including any individual who is deemed domiciled in the UK at the relevant time—see below), UK IHT at death is generally payable on the value of his or her worldwide assets (often with credit given for any equivalent tax paid overseas) whereas a non-UK domiciled individual will, in general, only pay IHT on assets situated in the UK. However, since 6 April 2017, IHT has also been charged on overseas property representing UK residential property even where the individual is non-UK domiciled and regardless of their residence status. An individual is subject to IHT on the aggregate of assets owned at death and gifts made in the seven years before death that are not otherwise exempt, less any allowable liabilities. Some trust interests are treated as ownership of the trust property by an individual where the individual has an

This Practice Note provides an introduction to intercreditor agreements and their key provisions. This Practice Note: • explains the purpose of having an intercreditor agreement and when an intercreditor agreement would be used instead of a deed of priority or subordination deed • provides links to helpful information on how to draft and negotiate an intercreditor agreement • sets out the key parties to an intercreditor agreement • provides an explanation of the key provisions found in an intercreditor agreement, including: ◦ ranking and subordination ◦ restrictions on payments to junior creditors ◦ amendments to transaction documents ◦ restrictions on taking enforcement action ◦ control of security enforcement strategy, and ◦ release of claims on disposals Different types of transactions have different typical structures and types of debt and there are also significant variations within each type of transaction. This Practice Note discusses provisions that are commonly seen in most intercreditor agreements. Purpose of an intercreditor agreement Why have an intercreditor agreement? The key purpose of the

This Practice Note provides a basic introduction to Islamic finance and in particular looks at: • the nature and scope of Shari’ah • sources of Shari’ah • key principles of Islamic finance • key participants in the Islamic finance market, and • key Islamic finance transaction structures Islamic finance framework Shari’ah or Islamic law is the legal system of the religion of Islam that sets out a system of duties or code of conduct for individuals to follow so that they may live their life in a fulfilling and beneficial manner. Although the phrase ‘Islamic law’ is widely used, Shari’ah is often the preferred term to demarcate from Western or Christian concepts of ‘law’ and associated assumptions, for example: • the Shari’ah is inherently non-secular and does not distinguish between religious and governmental institutions, authorities and ordinances • the Shari’ah is both a legal system and a moral framework, rather than, for example, a legal system underpinned or influenced by a moral framework, and • the Shari’ah regulates both public and private spheres The Shari’ah spans

Structure of an Ijarah transaction Key features • this is the equivalent of leasing in an Islamic finance structure and is a contract under which the owner (lessor) purchases an asset and then transfers the right to use and derive profit from that asset, known as the usufruct, to another person (the lessee) for an agreed period of time and an agreed consideration • the Islamic Financial Institution (IFI)/lessor will purchase an asset at the request of the Customer/lessee and must retain title to the leased property for the duration of the lease. This asset must be of a non-consumable nature and not one prohibited under Shari'ah and it is important that the lessor carries out the necessary due diligence to confirm this • the agreement usually provides the lessee with an option to purchase the asset at the end of the lease period for a nominal amount • the lessor and lessee enter into a lease agreement under which the lessee pays rent. This rent is made up of a payment

This Practice Note is intended as an introductory guide to LIBOR transition. It aims to answer some of the most frequently asked questions on LIBOR transition, explain and put key terminology into context, and provide links to more detailed content. Other key materials on LIBOR transition are: • LIBOR transition toolkit: our LIBOR transition toolkit is an interactive guide to the transition away from LIBOR to risk-free rates. The toolkit is a one-stop shop which includes links to Practice Notes, checklists and trackers as well as Q&As, useful Articles and News Analyses • the LIBOR developments tracker sets out developments in each LIBOR currency • Practice Note: Interest provisions in risk-free rate based loan agreements provides information on drafting a loan agreement based on risk-free rates (RFR), compounded in arrears (eg SONIA, compounded in arrears) • Practice Note: Term risk free rates in loan agreements provides information on drafting a loan agreement based on term RFRs, and discusses fallbacks to EURIBOR • Practice Note: LIBOR transition—legislative solutions to tough legacy contracts [Archived] explains the legislative

This Practice Note briefly summarises the main UK taxes which may apply to non-UK resident individuals, including income tax, capital gains tax (CGT), inheritance tax (IHT), value added tax (VAT), national insurance contributions (NICs), the annual tax on enveloped dwellings (ATED) and stamp duty land tax (SDLT). Broadly, UK tax legislation is subject to territorial limits, so that either what is taxed must have a UK source, or the person who is taxed, is resident in the UK. In contrast to many other jurisdictions, the UK tax year is not a calendar year, but runs from 6 April to 5 April. Non-residence for tax purposes An individual is non-resident for UK tax purposes if they satisfy the non-resident requirements of the statutory residence test after 5 April 2013, see Practice Note: Residence after 5 April 2013. For the tests for non-residence prior to 6 April 2013, see Practice Note: Residence before 6 April 2013 [Archived]. If an individual is non-resident for fewer than five years, they may be caught by the temporary non-residence

This Practice Note is intended as an introductory guide to acquisition finance for those with no, or limited knowledge of the area. It explains: • what is meant by acquisition finance • parties and documents on an acquisition finance transaction • how acquisition finance transactions are typically structured • the main stages of an acquisition finance transaction • the key areas of relevant law, and • recent developments of particular relevance to the leveraged finance market It also contains links to relevant resources within Lexis+. Understanding key terminology There is a large amount of terminology and jargon on acquisition finance transactions. For an explanation of commonly used terms, see Practice Note: Glossary of acquisition finance terms and jargon. It may be helpful to read this Practice Note in conjunction with the glossary. What is meant by the term acquisition finance? Acquisition finance transaction The term 'acquisition finance transaction' is usually used to describe an acquisition of a business substantially funded by debt which has been specially raised for the purpose of making the

Introduction and terminology The Insolvency Act 1986 (IA 1986) contains a number of provisions which may allow transactions entered into by an obligor in a lending scenario to be avoided on application by insolvency officeholders or creditors. Lawyers working on lending transactions should be mindful of these provisions at all stages of the lending cycle as they may impact transaction structuring, security and guarantees, receiving payments and drafting of a range of finance documents. The provisions and concepts are sometimes referred to as ‘antecedent transactions’, ‘reviewable transactions’ and ‘claw-back provisions’. Many of the provisions have a specific look-back period, ie transactions which took place during a specified period before the commencement of an insolvency process of an obligor can be challenged. Because of this, transactions (such as the grant of security) are often said to have a ‘hardening period’, ie the period during which transactions may be vulnerable to challenge under these provisions. These provisions should be borne in mind when dealing

What is asset finance? Asset finance is a method of providing financing for the purchase of particular tangible movable assets. The structure of the financing used will depend on the nature of the asset being purchased which range from cheaper, smaller items used in the day to day running of a business (such as a photocopier) to very expensive, large scale assets with a long useful economic life (such as an aircraft or ship). The finance can either be for the financing of a single, particular asset or for an entire portfolio of assets. A key characteristic of an asset finance transaction is that the asset itself which is being financed will be the primary security provided to the financier. The revenue provided through the use of the asset will repay the debt and service the interest payments. Practitioners advising on asset finance transactions may act for the owner of an asset (the lessor), the user of the asset (the lessee), the financiers, the manufacturers or the operators. There are two principal

The essence of aviation finance is that a lender will advance money to a borrower for the purposes of financing (or refinancing) its acquisition of an aircraft. In the event of the borrower defaulting under the loan agreement, the documentation and the legal structure of the transaction is intended to permit the lender to have prioritised access to the aircraft (or to its sale proceeds) to recover amounts outstanding under the financing. This may be seen as a classic form of asset finance (see Practice Note: Introductory guide to asset finance): the lender is taking credit risk on the borrower supported by security over the aircraft. However, aviation finance has developed certain specialised legal and structural specificities which set it apart from other types of finance. Specificities of aviation finance These may be summarised as follows: Future value Aircraft are considered to maintain their future value relatively well compared to other assets. Much depends on the actual model of the aircraft, and of the engines installed on it, but generally lenders are able to predict the

What does this Practice Note cover? This Practice Note sets out a basic introduction to derivatives with focus on: • what a derivative is • how to document and negotiate an over-the-counter (OTC) derivative • the different types of derivative structure • how derivatives are used in lending transactions • the different types of collateral and credit support used in OTC derivative transactions • how derivatives are cleared and settled • how derivatives are regulated • tax issues related to derivatives, and • resolving derivatives disputes What is a derivative? A derivative is a type of financial instrument whose value is based upon the value of an underlying asset, index, rate or reference point. Derivatives involve the transfer of risk from one party to another. They can be used to limit a party's exposure to a variable or allow a party to gain exposure to that variable. Many different types of entities enter into derivatives, such as banks, investment firms, governments, local authorities, supranational authorities and Pension funds. Derivatives are generally traded on the wholesale