What is the definition of a CFA? A conditional fee agreement (CFA) is defined in section 58 (2)(a) of the Courts and Legal Services Act 1990 (CLSA 1990) (as amended). The definition provides that a CFA is an ‘agreement with a person providing advocacy or litigation services which provides for his fees and expenses, or any part of them, to be paid only in specified circumstances.’ Therefore if the claim is: • successful the legal representative will be paid the full base costs together with a success fee (if a success fee is provided for in the agreement) • unsuccessful the legal representative will not receive any fees Whether disbursements are payable by the client will depend on the terms of the agreement. What is the definition of a CFA lite? The term ‘CFA lite’ was originally used to

What is a REIT? REIT stands for 'real estate investment trust'. A REIT is effectively a tax-free vehicle for real estate investment, with tax levied at the level of the investors rather than in the vehicle. The REIT regime was designed to provide 'liquid and publicly available property investment vehicles which are available to a wide range of investors' and which would raise 'productivity in the commercial property sector'. For more information on the REIT regime, see Practice Note: REITs—summary of the tax regime. Issues which should be considered when lending to a REIT When lenders are considering lending to a REIT, in many ways the credit analysis is the same as for other borrowers. For example, lenders need to consider: • the nature

This Practice Note provides an introduction to the HMRC tax-advantaged share incentive plan (SIP). It provides a summary of: • the types of award that can be made under a SIP • the main requirements that need to be satisfied to operate a SIP • the documentation likely to be required in connection with a SIP, and • the tax treatment for the employee and employer Background to a SIP The SIP gives employees the opportunity to acquire shares in their employer or a parent company of the employer on a tax-efficient basis. The legislative framework governing the SIP is mostly contained in: • Schedule 2 to the Income tax (Earnings and Pensions) Act 2003 (ITEPA 2003), which sets out how the SIP can be operated and the main conditions that have to be satisfied for the SIP to be a 'Schedule 2 SIP', and • ITEPA 2003, Pt 7 Ch 6 (ITEPA 2003, ss 488–515), which sets out how shares acquired under a SIP are treated for income tax purposes One

This Practice Note looks at the meaning of a permanent establishment (PE) for tax purposes, both under UK domestic law and in double tax treaties (DTTs). It is important to be able to identify at what point a non-UK resident company’s activity and presence in the UK amounts to a PE because it will be: • chargeable to corporation tax on any profits attributable to a trade carried on in the UK through that UK PE. For more information about what amounts to trading activity in the UK, see Practice Note: When does the UK tax non-resident companies?, and • chargeable to income tax on any non-trading income (eg interest, royalties, patents or fees) attributable to that UK PE Where the non-UK resident company is resident in a territory that has a DTT with the UK, and satisfies the requirements to benefit from the terms of that treaty, the PE definition in that treaty must be checked. This is because the definition of a PE under a DTT takes precedence over that in domestic

What is APP fraud? APP fraud (or Authorised Push Payment fraud) occurs when a victim is persuaded to voluntarily transfer funds from their own account to another bank account, which is either controlled by a fraudster or to which the fraudster has access. It is called ‘authorised’ because, from the bank’s perspective, the payment has been authorised by the customer. In October 2016, the Consumer’s Association ‘Which?’ made a super-complaint to the Payment Services Regulator, raising the prevalence of APP fraud and concerns regarding consumer safeguards. By 2021, losses to APP scams totalled £583.2m, a 39% increase on the previous year. APP fraud and a bank’s ‘Quincecare duty’ Deriving its name from the 30-year-old case of Barclays Bank v Quincecare Limited, the Quincecare duty is an implied contractual term between the bank and its customer that it will exercise reasonable skill and care when executing the customer’s orders. The case considered a bank’s liability for executing banking instructions provided by the customer’s agent, which

A capital contribution reserve typically arises when an irrevocable gift has been made to a company by a shareholder (ie new shares are not issued in consideration). Such a payment often arises in the context of overseas companies, where a parent company makes a long term loan to a subsidiary at a below market rate of interest. The difference between the face value of the loan, and its discounted value using a market rate of interest, is required to be credited to a capital contribution reserve. The Privy Council (PC) case of Keller v Williams [2000] 2 BCLC 390 explored the context in which capital contributions might arise and how the funds might be used. The

When a person disposes of an asset and makes a profit that is capital in nature, this has the potential to be a taxable capital gain. When deciding whether a charge to tax arises, there are a number of issues to consider: • the asset, the disposal, and the person making the disposal must all be of a type that can attract CGT • the 'consideration minus costs' calculation described in Practice Note: How is a capital gain calculated? must result in a gain • an exemption or relief may apply • there may be losses to set off against the gain These are explained below. For information on what makes a profit capital (rather than revenue) in nature, see Practice Note: Taxation of trading profits—basis, receipts and deductions—Receipts—Capital v revenue. In addition, there are special regimes for taxing companies that take precedence over the chargeable gains rules, including the intangible fixed asset rules and the loan relationships rules. For further information, see: Intangible fixed assets and tax—overview and Loan relationships—overview. In this Practice

The following types of certified copies and certificates are available from Companies House: • a certificate of incorporation with certified facts, and • a certified copy of a document held on the register A certificate of good standing states that a company has been in continuous, unbroken existence since incorporation and that no action is currently being taken to strike the company off the register. The registrar at Companies House will only issue this type of certificate if the company's confirmation statements (previously annual returns) and accounts are up-to-date

A certificate of title (also known as a certificate on title) is a particular species of report on title. When solicitors are instructed to investigate title to land (for instance, when land is being acquired or offered up as security), they will write a report on title for their client, which sets out the findings of the investigation. Those findings will include, for example, details of any rights of which the land has the benefit and any charges, easements or other third-party interests or potential interests that burden the land. The process of title investigation is also known as legal due diligence. See Real estate in corporate transactions—overview for further information. On occasions, solicitors will be instructed by their client to write a report on title for someone other than the client itself, for instance for a mortgage lender or a buyer of shares in a company that owns the land, or in connection with a company flotation or a tender transaction where there are a number of bidders. Such a report addressed

This Q&A focuses on class rights attaching to shares, but a company that does not have a share capital may have separate classes of members, with different rights. A company having a share capital may have separate classes of shares. The rights attaching to a particular class of shares will usually be set out in a company’s articles of association or in a shareholders’ resolution approving the allotment of the shares and there may be further shareholder resolutions amending share rights in accordance with the Companies Act 2006 (CA 2006). Rights attaching to a particular class of shares may also be set out in a shareholders’ agreement. It should be noted that the rights attaching to a share will not necessarily be class rights. There is nothing in CA 2006 to assist in identifying or defining a class right, other than CA 2006, s 629, which states that shares are of one class if the rights attached to them are in all respects uniform (but that the rights

This Practice Note considers when the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) applies. In summary: • the HGCRA 1996 applies to ‘construction contracts’ • ‘construction contract’ is defined by HGCRA 1996, s 104 • a ‘construction contract’ will involve ‘construction operations’ as defined by HGCRA 1996, s 105 • a ‘construction contract’ must include certain provisions relating to adjudication and payment • in respect of ‘hybrid’ contracts (ie those relating to both construction operations and other matters), the HGCRA 1996 will only apply in respect of the construction operations • the mandatory provisions do not apply to contracts with residential occupiers • for contracts entered into prior to 1 October 2011, the HGCRA 1996 only applied to contracts which were made in writing Significance of contract being a construction contract Statutory adjudication Parties only have a mandatory right under HGCRA 1996 to adjudicate if the relevant contract is a 'construction contract' (as defined by HGCRA 1996, s 104). If a contract is a ‘construction contract’, it must contain

This Practice Note covers the legal and regulatory framework to be considered in determining whether an arrangement constitutes a contract of insurance and the possible consequences of carrying on activities relating to a contract of insurance without the requisite regulatory permissions. For further guidance, see Practice Note: Identifying contracts of insurance in English law—an introduction and the decision tree in Identifying a contract of insurance—flowchart. The legislative and regulatory background English insurance legislation does not provide a clear or an exhaustive definition of a ‘contract of insurance’. The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO), SI 2001/544 defines a ‘contract of insurance’ as ‘any contract of insurance which is a contract of long-term insurance or a contract of general insurance’. The question of whether a contract is a contract of insurance is important because rights under a contract of insurance are 'specified investments' under the RAO. The RAO also specifies activities which, when carried on by way of business in relation to those investments, are regulated activities. Under section 19 of the Financial Services