Clarke Willmott
4 Experts
4 Contributions by Clarke Willmott
PRACTICE NOTES
Even with advanced procurement techniques, scheduling tools and project management applications, construction schemes can still run late and overrun. Any slippage triggers extra cost. This Practice Note explores the delay damages regime designed to safeguard an employer if delay occurs, highlighting the relevant FIDIC clauses and other standard form contracts used in the energy sector that address delay damages. See also Practice Notes: Delay and disruption in construction projects and Time and money claims.
The importance of time in energy projects
Construction and energy contracts devote substantial attention to time, particularly setting a completion date. Most building contracts provide for delay damages (also termed liquidated damages or liquidated and ascertained damages (LADs)). The core concept is that, on specified breaches by the contractor—commonly failure to complete on time, but potentially performance shortfalls—agreed damages become payable to the employer. Fixing those sums before contract award seeks to avoid
Construction
PRACTICE NOTES
Background
An energy asset’s output, together with the project’s capacity to achieve the contracted power generation and income, will generally ultimately set the level of investment that a funder is prepared to commit.
For employers and funders alike, it is essential that the construction contract embeds suitable testing, take-over and defects processes, so that the project yields optimum power and revenue, and any shortcomings affecting those outcomes are detected and addressed at the earliest possible stage of the delivery period.
This Practice Note examines why testing protocols and defect remedies within the FIDIC Silver Book, and other widely adopted energy sector contracts, matter, and highlights the practical issues that must be weighed when structuring and executing energy projects successfully.
For fuller overviews of the FIDIC Silver Book, refer to Practice Notes: FIDIC
Construction
PRACTICE NOTES
This Practice Note examines when the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) is engaged on UK energy projects and highlights practical issues that can arise. It should be read together with Practice Note: What is a construction contract under the HGCRA 1996? The HGCRA 1996 applies to all construction contracts, as defined in the Act, across the following jurisdictions:
England
Wales
Scotland
When drafting a contract, parties should assess whether the on-site works fall within the scope of the HGCRA 1996 and, if so, ensure the terms are compliant. This discussion frequently surfaces on energy schemes where some or all elements of the works may sit within the statutory exclusions...
Does the HGCRA 1996 apply to energy projects?
For the HGCRA 1996 to apply, the agreement must meet the definition of a ‘construction contract’ in section 104—being a contract for
Construction
PRACTICE NOTES
UK energy projects commonly follow three principal procurement routes:
engineering, procurement and construction (EPC) contract procurement
split EPC contract procurement
multi-party contract procurement
This Practice Note summarises each route and explores selected advantages, disadvantages and practical points to bear in mind. It is intended as a straightforward guide; seek professional legal advice before deciding on a procurement pathway for your specific scheme.
EPC contract procurement
The EPC route is the predominant procurement model for UK energy, as well as other large-scale, complex infrastructure developments. Under an EPC arrangement, a single contractor undertakes end-to-end delivery of the project, including design, engineering, procurement of materials, construction, and the testing of mechanical elements.
For additional guidance on EPC arrangements, refer to the following Practice Notes: Introduction to EPC contracts; EPC contracts—handover, testing and commissioning; and EPC contracts—limits of liability. The diagram below depicts the core contractual structure for a project procured via the EPC route with
Construction
22 Contributions by Clarke Willmott Experts
PRACTICE NOTES
The distinct class of age 18–25 trusts was brought in by the Finance Act 2006 (FA 2006) to offset the withdrawal of traditional accumulation and maintenance (A&M) trusts. Under the A&M framework, trusts established for children and young people up to 25 benefited from exemption from inheritance tax (IHT) charges under those arrangements. Although the qualifying rules were quite tight and specific, they allowed any settlor, whether during life or on death, to provide for younger beneficiaries. See Practice Note: Accumulation and maintenance trusts—IHT [Archived].
After FA 2006:
existing A&M settlements kept their IHT advantages solely where the beneficiaries became outright entitled to trust property by the age of 18
new A&M type trusts could be set up for a child under 18 whose parent had died—see Practice Note: Taxation of trusts for bereaved
Private Client
PRACTICE NOTES
This Practice Note reviews what a ‘bare trust’ means and the inheritance tax (IHT) approach taken to these arrangements. For details on the income tax and capital gains tax (CGT) position of a bare trust, see Practice Note: Bare trusts—income tax and CGT.
What is a bare trust?
The label ‘bare trust’ refers to an arrangement where legal title to property sits with someone other than the beneficial owner of that same property for practical purposes. The beneficiary has unfettered rights to capital and income, while the legal holder undertakes the administration and day-to-day control of the assets concerned. Some examples of when a bare trust may exist are outlined below for guidance.
Assets held for minors (children)
Bare trusts gained in popularity following significant changes to the IHT treatment of settlements made by the Finance Act 2006 (see Practice Note: Finance Act 2006 changes to trust
Private Client
PRACTICE NOTES
This Practice Note, created with Phil Roberts of Clarke Willmott, sets out a case study exploring the various routes, at both pre-action and post action stages, to safeguard a would-be or actual judgment creditor in pursuing debt recovery—in this instance a footwear supplier. It outlines core principles around guarantees, retention of title provisions, and enforcement options including charging orders, taking control of goods, and third party debt orders, with signposts to related materials on each area.
The case study
Please note: all names in this case study are entirely invented and any resemblance to real individuals, businesses or companies is purely coincidental and unintended. Pollyanna Pride has supplied shoes to Mr Cobbler of Shoes It Is for nearly three years. Her products are unique soft leather designer boots. They typically sell strongly, despite a retail tag of £295 per pair. Pollyanna takes special pride that,
Dispute Resolution
PRACTICE NOTES
This Practice Note explains how to enforce a warrant of control issued by the County Court as a means of enforcing a money judgment. Through this route, the judgment creditor instructs a county court bailiff (CCB) to take control of the judgment debtor’s goods and sell them, applying the sale proceeds to satisfy the judgment debt. The detailed steps are contained in the legislation underpinning the Taking Control of Goods regime—see Practice Note: Finding your way through the Taking Control of Goods legislation for guidance on that framework. In broad terms, the practitioner should decide which enforcement method will be most effective for the judgment creditor. For sums over £600 many creditors prefer to instruct a High Court Enforcement Officer (HCEO), a private individual authorised by the Lord Chancellor’s office, rather than a CCB, who is a salaried civil servant employed by the
Dispute Resolution
PRACTICE NOTES
Practice Note
This Practice Note outlines the core income tax rules relevant to discretionary trusts and to any trusts that may retain income. Until the trustees choose to distribute funds to a beneficiary, that income is not the property of any individual. Accordingly, while the income is held by the trustees, it is charged at the special trust rates. If, and when, amounts are passed to beneficiaries, there are provisions that recalibrate the tax borne so it aligns with the beneficiary’s proper rate. See Practice Notes: Taxation of discretionary and accumulating trusts—the tax pool and Discretionary trust beneficiaries—income tax. For tax purposes, the trustees are collectively treated as a single person, separate from the natural persons who serve as trustees from time to time. Where more than one trustee is appointed, one—commonly called the ‘principal acting
Private Client
PRACTICE NOTES
This Practice Note examines the UK tax consequences of a UK-resident trust relocating out of the UK. Guidance on the continuing taxation of trusts that are not resident in the UK is also available in the Offshore trusts—taxation subtopic.
How does a trust migrate?
For a trust to move its residence from the UK, the UK trustees would usually resign formally from office and be replaced, in their stead, by newly appointed trustees who are not UK resident. For details on replacing trustees, see the Practice Notes: Trustees—appointment of trustees and Trustees—retirement of trustees. For additional guidance on trustee residence, see the relevant Practice Note: Tax position of non-resident trusts. A trust may emigrate where the trust deed grants the trustees (or another person, eg the protector or the settlor) an express authority to appoint non-UK resident trustees. Courts will ordinarily respect any such
Private Client
PRACTICE NOTES
This Practice Note, prepared with Phil Roberts of Clarke Willmott LLP, summarises the enforcement routes available to someone who has just obtained a County Court judgment for £4,000. For a visual overview, see: County Court judgment creditor—flowchart.
What are your options to enforce a County Court judgment for £4,000?
charging order—(see the Charging Orders Act 1979 (COA 1979), CPR 73 and CPR PD 73)
transfer the judgment to the High Court and obtain a writ of control (CPR 83 and the Tribunals, Courts and Enforcement Act 2007 (TCEA 2007))
warrant of control (CPR 83, TCEA 2007, the Taking Control of Goods Regulations 2013, SI 2013/1894)
attachment of earnings (CPR 89 and the Attachment of Earnings Act 1971 (AtEA 1971))
third party debt order (CPR 72)
an order to obtain information (CPR 71)
Securing a judgment can be
Dispute Resolution
PRACTICE NOTES
What is a trust for a bereaved minor?
The Finance Act 2006 introduced a distinct, special category of trusts for bereaved minors (TBM), sometimes also called a bereaved minor’s trust (BMT), to provide IHT concessions for trusts set up in favour of children with a deceased parent. Before 22 March 2006, trusts of this kind would have fallen within the broader Accumulation and Maintenance (A&M) regime, but no new A&M trusts can be created after that date. See Practice Note: Accumulation and maintenance trusts—IHT [Archived]. TBMs have a more limited application than A&M arrangements. Except in rare circumstances explained below, they are brought into being on the death of a parent for the benefit of that parent’s minor children. A bare trust is not a TBM. Typically, a beneficiary’s entitlement under a TBM is contingent upon attaining 18 years of age. The trustees will
Private Client
PRACTICE NOTES
What is a fixed interest trust/interest in possession for trust law purposes?
The entitlement a beneficiary holds in trust property can take the form of a fixed interest, conferring a right to income and/or capital, or it can hinge on the trustees’ exercise of a discretionary power (or that of another holder of a power) to confer benefits, after which the beneficiary acquires a fixed, limited or absolute, interest in the relevant property. It should be borne in mind that the concepts used in trust law and in tax law do not align; thus an interest in possession (IIP) for trust law purposes will not automatically amount to a qualifying IIP (QIIP) for inheritance tax (IHT) treatment. If the trust is governed by a system of law other than that of England & Wales, the construction of its terms falls to that
Private Client
PRACTICE NOTES
Relevant property
The phrase 'relevant property' identifies a class of trust assets that falls within a distinct inheritance tax (IHT) regime. As outlined in Practice Note: Introductory guide to the taxation of trusts, the IHT treatment of trust assets sits in two principal groupings:
beneficial entitlement
relevant property
Within the 'beneficial entitlement' grouping, trust assets are charged to IHT as though the beneficiary owned them outright. They are regarded as the beneficiary’s and are included within their estate. This generally applies where the beneficiary enjoys a qualifying interest in possession (QIIP), or holds an absolute entitlement to the trust assets. See Practice Notes: Qualifying interest in possession trusts—IHT treatment and Bare trusts—IHT.
In contrast, relevant property has a separate tax existence. Once it is effectively taken out of the settlor’s estate, it is not assessed as part of any other person’s estate. To balance this, a
Private Client
PRACTICE NOTES
This Practice Note aims to help identify opportunities to use a Third Party Debt Order (TPDO) to enforce a money judgment. For procedural guidance and answers to common queries, see the following Practice Notes:
How to apply for a third party debt order (TPDO)
Third party debt orders—flowchart
Third party debt orders—frequently asked questions
Is a TPDO worth the effort?
Once a money judgment has been obtained, if it is not paid the creditor can take enforcement steps. The choice of enforcement method rests entirely with the creditor (see CPR 70.2(2)). TPDOs are the least commonly used route. This is probably because the creditor must present the court with evidence of their knowledge or belief that a third party is indebted to the debtor (CPR PD 72, para 1.2(7)), which can be difficult. Ministry of Justice statistics for 2024 indicate that, of the total
Dispute Resolution
PRACTICE NOTES
This Practice Note addresses several frequently asked questions that may arise when deciding whether to pursue a Third Party Debt Order (TPDO). For guidance on what a TPDO is and the steps to obtain one, see Practice Notes:
What is a third party debt order (TPDO)?
How to apply for a third party debt order (TPDO)
Does a TPDO have to be issued against a financial institution?
No. You can apply for a TPDO against any third party within the jurisdiction that owes money to your debtor. This extends to an individual who is a debtor of the judgment debtor.
Can a TPDO be made in respect of cryptocurrency?
Following the decision in Ion Science Ltd v Persons Unknown (2020) (not reported by LexisNexis), the High Court confirmed that crypto assets are capable of being treated as property and can be traced and enforced
Dispute Resolution
PRACTICE NOTES
Capital losses arising to trustees
For trustees, capital losses are computed on the same basis as for individuals (for more detail on individual losses, refer to Practice Note: CGT—utilising capital losses). Losses are offset against gains in the same year of assessment in the way that produces the most advantageous result; any amount not relieved can be carried forward and set against gains arising in later years. Carry-back to an earlier year is not permitted. Brought-forward losses need only be used against subsequent gains to the extent needed to reduce that year’s gains to the applicable annual exemption, ensuring the allowance is not wasted. A formal claim is required for losses to be allowable, usually on the Capital Gains supplementary pages of the Trust and Estate Tax Return. The general time limit for claims and reliefs is four years from the end of the
Private Client
PRACTICE NOTES
This Practice Note outlines how trustees of bare trusts are treated for income tax and capital gains tax (CGT). Although, in equity, a bare trust is a form of trust, for both income tax and CGT its existence is disregarded. As a result, no liability to tax sits with the trustees for either income or chargeable gains. Instead, the two regimes look through to the beneficiary, who is assessed at their own rates of tax.
Income tax
The legislation in the Income Tax Act 2007 (ITA 2007), which sets out the settlements rules for income tax, excludes bare trusts from those provisions. Several provisions in ITA 2007 treat actions carried out by a bare trustee as though they were undertaken by the absolute beneficial owner...
Private Client
PRACTICE NOTES
General principles
For capital gains tax (CGT) purposes, trustees are regarded as a single chargeable person in their own right, distinct from the individual trustees. Although people often speak of trusts as if they, like a company, had their own separate legal personality, it is crucial to remember they do not. The process for working out a chargeable gain arising to trustees is largely the same as that used for an individual.
Trustees may choose to sell trust assets where, acting in line with their duties as trustees (see Practice Note: Trustees—duties), they believe this best serves the beneficiaries’ interests. Where trust property is in fact disposed of by an arm’s length sale to an unconnected third party, the computational rules use the consideration received for the disposal to calculate the chargeable gain. Besides actual disposals of trust property, trustees can be deemed to make a
Private Client
PRACTICE NOTES
Capital gains tax (CGT)
CGT provisions have long offered substantial relief to owners exiting their businesses. Up to 2008, assistance came through business asset taper relief and, earlier still, through retirement relief. When taper relief was scrapped in 2008, entrepreneurs’ relief was brought in to sustain the preferential effective CGT rate on business assets previously available under taper. From 6 April 2020, entrepreneurs’ relief took on a new name: business asset disposal relief (BADR). In essence, BADR lowers the CGT rate payable by business proprietors when they dispose of their business. Trustees may likewise claim BADR on the sale of business assets they hold, in the same way as individuals, provided the requisite conditions are met. For further detail on when individuals can obtain BADR and the qualifying conditions more generally (including the amendments introduced by Finance Act 2016 and Finance Act 2019 (FA
Private Client
PRACTICE NOTES
This Practice Note provides a concise overview of the principal capital gains tax (CGT) reliefs and exemptions relevant to business assets and available to trustees, as well as to individual business owners. It considers the following areas.
CGT reliefs for trustees carrying on a business, namely:
business asset roll-over relief
incorporation relief
CGT reliefs and incentives for trustees as investors, namely:
enterprise investment scheme (EIS) and seed enterprise investment scheme (SEIS)
relief on company reorganisations
relief for losses on loans to traders
EIS and SEIS play a significant role in drawing investment into a business. That said, this Practice Note concentrates on the tax treatment of both schemes for trustees in an investor capacity, ie the EIS income tax and CGT benefits available to an investor.
The reliefs excluded from this Practice Note, but covered in separate Practice Notes, are:
CGT
Private Client
PRACTICE NOTES
Trustees and personal representatives can, in fact, carry on a trade. For example, where a self-employed trader dies, the personal representative may keep the business running until it is wound down or sold. In the same way, trustees or interest in possession beneficiaries might be trading and could qualify for reliefs such as roll-over relief or business asset disposal relief. The broad tax rules governing trading apply to all traders alike, whether they are individuals, trustees, or personal representatives. This Practice Note sets out those principles below.
Is there a trade?
The key issue to examine is whether there is a trade. At times this will be clear, for instance when personal representatives step in to continue the deceased’s business; however, in other situations even a solitary transaction can amount to a trade. As an illustration, trustees who buy a property to renovate may,
Private Client
PRACTICE NOTES
This Practice Note reviews the obligation on trustees to file a Trust and Estate Tax Return (form SA900) where a trust is chargeable to income tax and/or capital gains tax (CGT). For guidance on the rules governing trust income, expenses and capital gains, and the computation of tax liabilities, see the Trusts—income tax and capital gains tax subtopic. For commentary on completing the Trust and Estate Tax Return for estates by personal representatives, see Practice Note: Estate tax returns and informal procedures. All UK express trusts (not solely those with a UK tax liability in a given tax year) must be registered with the Trust Registration Service (TRS) unless an exemption applies. See Online registration and beneficial ownership information reporting requirements for trustees below for further guidance.
Requirement to submit a tax return
The income and gains of trusts fall within the Self
Private Client
Q&As
This Q&A focuses on public procurement under the Public Contracts Regulations 2015 (PCR 2015), SI 2015/102
As a general principle, the PCR 2015, SI 2015/102 affords bidders considerable latitude to shape bid partnerships and supply chain models to suit their approach. Under PCR 2015, SI 2015/102, reg 63(1), tenderers can draw upon the resources of other organisations to satisfy selection requirements covering economic and financial standing, along with technical and professional capability. A limited carve-out appears at PCR 2015, SI 2015/102, reg 63(7), which permits contracting authorities to stipulate that specified ‘critical tasks’ in a public services or public works contract must be carried out by the prime contractor, or by one from a consortium of primes. Put differently, suppliers are, in most cases, free to deploy their chosen subcontractors when delivering a public contract. That said, this is subject to any express
Local Government
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