Legal Practice Notes

FORTHCOMING CHANGE As trailed in the Autumn Budget 2024, the government set up an independent review of the loan charge. Formally launched on 23 January 2025, the review’s remit was to examine the obstacles preventing those subject to the loan charge, who have not already settled and paid their tax liabilities in full, from reaching a resolution with HMRC, and to propose ways in which they could be encouraged to settle with HMRC (see News Analysis: Autumn Budget 2024— Independent review of the loan charge). To aid the review, an official call for evidence, directed at individuals who remain within the loan charge (and their advisers), was also subsequently published on 28 March 2025. The Final Report of the review, alongside the government’s response, was formally issued at Budget 2025 on 26 November 2025......

This Practice Note outlines existing, upcoming and possible devolved taxes and tax administration measures in: Scotland, Wales, and Northern Ireland. Where a devolved levy operates, it signposts to fuller guidance elsewhere in Practical Guidance. For a broad overview of devolution in Scotland, Wales and Northern Ireland, see Practice Note: An introduction to devolution in Scotland, Wales and Northern Ireland... Devolution in Scotland Tax administration and compliance The Revenue Scotland and Tax Powers Act 2014 ( RSTPA 2014): creates Revenue Scotland ( Scottish Gaelic: Teachd-a-steach Alba) within the Scottish Administration, operating independently of the Scottish Ministers defines Revenue Scotland’s remit, covering the general role of collecting and administering devolved taxes and specific duties in relation to devolved taxes—excluding council tax and business rates; the devolved taxes are Land and Buildings Transaction Tax ( LBTT) and Scottish Landfill Tax—including: (1) providing information and help to the...

An individual is treated as UK domiciled where, although they are domiciled outside the UK under the common law principles outlined in Practice Note: Domicile for UK tax purposes before 6 April 2025 [ Archived], a statutory rule nevertheless treats them as domiciled for one or more tax purposes. This Practice Note looks only at the deemed domicile provisions that came into force on 6 April 2017, and insofar as they apply to individuals. For details of the deemed domicile rules in place before that date, see Practice Note: Deemed domicile for tax before 6 April 2017 [ Archived]. In contrast to domicile at common law, deemed domicile is not inherited from parent to child. For information on the regime brought in by the Finance Act 2013 allowing a non- UK domiciled spouse or civil partner of a person domiciled in the UK to elect to be...

ARCHIVED : This Practice Note has been archived and is not maintained. STOP PRESS : This Practice Note is archived and no longer updated. As of 28 March 2023, the disclosable arrangements ( DAC 6) regime was superseded by the Mandatory Disclosure Rules ( MDR). The DAC 6 legislation and accompanying HMRC guidance have been withdrawn. As outlined here, the scope of the UK’s disclosure rules was materially narrowed from IP completion day (11 pm on 31 December 2020). The residual disclosure obligations were then wholly replaced on 28 March 2023 by new rules implementing the OECD MDR, as set out in The International Tax Enforcement ( Disclosable Arrangements) Regulations 2023, SI 2023/38 (the MDR regulations). Although the DAC 6 Regulations, SI 2020/25, were revoked with effect from 28 March 2023, they continue to apply to arrangements entered into before that date. An...

STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime The Finance Act 2025 ( FA 2025), granted Royal Assent on 20 March 2025, enacts the removal of the remittance basis and introduces a residence-based system from 6 April 2025. This shift takes effect from 6 April 2025, fully supplanting the prior remittance basis entirely. FA 2025 also substitutes domicile as the principal determinant of liability to inheritance tax. Additional reforms include revising the rules for excluded property status, ending the protected settlements status for offshore trusts, and updating overseas workday relief. For further information on these measures, see: Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. FORTHCOMING CHANGE : On 27 April 2023, the former Conservative government launched a consultation (closing 22 June 2023) on altering the tax...

Philanthropy is a foundational strand of the wealth planning of many ultra-high-net-worth individuals and their families ( UHNWIs). Approaches to advancing a person’s charitable ambitions range from straightforward cash gifts to creating and managing their own charitable organisation. Frequently, these efforts span several jurisdictions, supported by emerging payment tools, crowdfunding platforms and innovative transaction models. This Practice Note highlights some of the considerations for UK-connected UHNWIs undertaking cross-border charitable and philanthropic initiatives. UK as a centre for cross-border philanthropy The UK provides notable strengths as a home for charities working domestically and internationally. These include the UK’s tax environment and regulatory framework, alongside its longstanding tradition of multiculturalism. UK regulation of charities Charities in England and Wales operate under a well-developed combination of statutory and common-law principles, delivering both stability and the capacity to adapt to societal change. Central to this framework is an...

STOP PRESS: Abolition of non-dom regime and remittance basis of taxation from 2025–26 From 6 April 2025, the Finance Act 2025 abolishes the remittance basis of taxation, replacing it with a regime centred on residence. The reforms introduce a new Foreign Income and Gains ( FIG) regime and adjust overseas workday relief. For more on these updates, see Practice Note: The abolition of the remittance basis of taxation from 2025–26. As employees become increasingly globally mobile, employers may frequently need to navigate and comply with multiple legislative obligations across various jurisdictions. The taxation of an employee’s earnings is a key concern for both employer and employee and should be fully analysed and understood before any cross-border employment begins. Accordingly, this Practice Note highlights the main UK employment tax issues that may arise when: non- UK entities employ UK-based individuals UK entities employ non- UK...

This glossary provides brief explanations and definitions of widely used terms in the context of forming a company... Alternative record-keeping Provisions in Part 8 of the Companies Act 2006, added by Schedule 5 to the Small Business, Enterprise and Employment Act 2015, permit private companies and LLPs to hold specified information on the central register maintained by the Registrar of Companies rather than on their own registers. The Economic Crime and Corporate Transparency Act 2023 is changing information and record-keeping obligations, so some registers will be abolished and the option to keep certain details on the central register will be removed. For more, see Practice Note: Alternative record-keeping—electing to maintain information on the central register and Implementation of the Economic Crime and Corporate Transparency Act 2023... Articles of association Commonly shortened to the articles. This is the key constitutional document of a company (see also...

The common law trust has long played a role across a range of commercial structures; yet its deployment is subtle and tailored to the circumstances of each arrangement. Although the equitable foundations of classic trusts remain pertinent, courts increasingly accept that the intricate rules devised for traditional trusts cannot simply be transplanted into commercial trusts. A trust possesses distinctive qualities that differentiate it from other legal relationships—such as contract, agency and bailment. This Practice Note highlights several established and potential applications of a trust that is deliberately constituted to achieve a commercial objective. Trusts arising by operation of law regardless of the parties’ intentions, or emerging from litigation, fall outside the scope of this Practice Note... What is a trust? See Practice Notes: An introduction to trusts for commercial lawyers and Nature and classification of trusts—the nature and...

It should not be presumed that the fiscal treatment of charities is uniform across every tax regime. Broadly speaking, charities benefit from significant tax reliefs. Nevertheless, income tax and corporation tax do not generally mirror the rules for, say, VAT, so the fact that a charity is relieved from VAT does not guarantee it avoids income tax, and the converse can also apply. Essentially, the initial obstacle is to demonstrate to HMRC that the body is a charity; that is, it exists solely for charitable purposes. Subsequently, the income tax reliefs for charitable trusts are contained in Part 10 of the Income Tax Act 2007 ( ITA 2007), while corporation tax provisions for charitable companies are found in Part 11 of the Corporation Tax Act 2010 ( CTA 2010)......

There are several tax reliefs available for donations to charities... Gift Aid Gift Aid allows charities and community amateur sports clubs ( CASCs) to enhance cash gifts from UK taxpayers by reclaiming 25p for every £1 the donor contributes. A claim is permitted if the donor: has paid the same amount or more in Income Tax or Capital Gains Tax in that tax year completes a Gift Aid declaration authorising the organisation to claim However, Gift Aid is not available on donations: from limited companies made via Payroll Giving given as payment for goods or services, or because the charity or CASC purchased goods or services that began as loans which no longer need to be repaid where the donor receives a ‘benefit’ over a specified limit of shares made using charity cards or vouchers, for example...

FORTHCOMING CHANGE relating to the reform of offshore anti-avoidance legislation: On 21 July 2025, HMRC released a summary of responses to its call for evidence on personal tax offshore anti-avoidance legislation, following a consultation that ran from 30 October 2024 to 19 February 2025. The call for evidence sought high-level input across a number of legislative areas, including the rules attributing gains to participators in non- UK companies. In publishing the outcome, the government notes it will consider how best to engage further with relevant experts to shape and advance additional consultation across this area as a whole, with an update to be provided at the Autumn Budget 2025. Any legislative changes arising from this consultation are not expected to apply before the 2027–28 tax year, at the earliest. For further details, see News Analysis: Legislation Day: Draft Finance Bill 2026— Private Client...

Date of disposal The moment an asset is regarded as disposed of determines the period in which any gain is chargeable to capital gains tax ( CGT), or when a loss can be set against other gains. This timing is particularly significant where CGT rates shift between tax years, or within a tax year, as happened in 2024–25. The disposal date also governs when any CGT is payable—usually by 31 January following the close of the tax year in which the disposal occurs. Different rules apply to disposals by non-residents and for UK residential property, as outlined below. How the disposal date is established depends on the form of disposal made. CGT is normally due by 31 January after the relevant tax year ends. Changes in CGT rates across tax years (or within 2024–25) make timing...

FORTHCOMING CHANGE relating to the tax treatment of carried interest: Following a summer 2024 call for evidence on how carried interest is taxed, the government used Autumn Budget 2024 to confirm plans for a revamped carried interest regime from 6 April 2026. This will be brought within the income tax system, with bespoke provisions to reflect the distinctive features of the reward. It will feature tailored measures recognising how such rewards operate in practice. A subsequent consultation explored fresh qualifying criteria for entry to the regime, and the government published its response in June 2025, following that exercise and the consultation process. On 21 July 2025, draft clauses setting out the new carried interest rules were released for inclusion in Finance Bill 2026. The regime will apply to carried interest that arises on or after 6 April 2026. Meanwhile, from 6 April 2025 the...

This Practice Note is archived and is no longer updated. STOP PRESS: Ending the non-dom regime and moving to a residence-based IHT system Finance Act 2025 ( FA 2025), granted Royal Assent on 20 March 2025, enacts the abolition of the remittance basis and substitutes a residence-based approach from 6 April 2025. FA 2025 likewise makes domicile no longer the primary determinant of exposure to inheritance tax. Further measures cover revisions to the rules for excluded property status, the removal of protected settlements status for offshore trusts, and alterations to overseas workday relief. For more on these developments, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates ( Finance Bill 2025) and Finance Act 2025. This Practice Note addresses the specific capital loss election available to...

Introduction A charge to capital gains tax ( CGT) arises when a chargeable person makes a chargeable disposal of a chargeable asset, which may lead to a gain or a loss. The principles are outlined in the Practice Note: Introductory guide to CGT. This Practice Note sets out the general rules for deciding whether an individual has made a gain or loss on a chargeable disposal. Basic CGT calculation For disposals from 6 April 2008 onwards, a straightforward cash-based calculation applies. Begin with the sale proceeds ( P) and deduct the incidental costs of sale ( C) to reach a subtotal. From that balance, deduct the costs of acquisition ( A) and add any enhancement expenditure ( E). The resulting figure is the chargeable gain or allowable loss ( G). Allowable deductions from the proceeds Incidental costs of making the disposal are deductible where incurred wholly and...

A charge to capital gains tax ( CGT) arises when a chargeable person makes a chargeable disposal of a chargeable asset. A chargeable person includes an individual, the personal representatives ( PRs) of a deceased person, and trustees of a settlement, each subject to residence conditions. Companies are legal persons too and, for disposals before 6 April 2019, could fall within CGT. For general information on CGT, see Practice Notes: Introductory guide to CGT and CGT—basic principles for trusts. The term ‘disposal’ is not defined, but typically covers a sale, an exchange or a gift of an asset. It also encompasses a part disposal, the settlement of an asset on trust, and the disposal of a beneficial interest in an asset already held on trust. The need to value an asset To calculate the CGT charge, both the acquisition value and the disposal value of the...

CGT reliefs most relevant to Private Client Multiple reliefs exist to lessen or defer capital gains tax ( CGT) arising on the disposals of both business and personal interests......

Principal private residence relief Where an individual holds more than one residence, they may, by formally giving notice to HMRC, nominate which property is to be treated as their main residence for principal private residence ( PPR) relief purposes. In these circumstances, any period of actual ownership (by election) of the elected PPR should be regarded as fully exempt from capital gains tax ( CGT), provided there has been a previous period of actual occupation. In addition, the last nine months of the period of ownership are always deemed to be a period of occupation. Before 6 April 2014, the exemption covered the final 36 months of ownership; it was reduced to 18 months from 6 April 2014, and halved again to nine months for disposals on or after 6 April 2020. Individuals who are disabled or residing in a care home, and who have no...

Giving an asset away counts as a disposal for capital gains tax ( CGT). This may, therefore, crystallise a CGT charge on any gain that is treated as having arisen. The general rule For CGT purposes, a gift is treated as a disposal for consideration equal to the asset’s market value. The recipient’s (donee or transferee’s) base cost is that market value. For details on the disposal value, see: Introductory guide to CGT. The same approach generally applies to any bargain not made at arm’s length, which can include a sale for less than full value, though not in every instance. Any gain arising on a gift or a sale at an undervalue is chargeable in the usual way, and losses are allowable in the normal manner. Gifts between spouses and civil partners A transfer to a spouse or civil partner will not give rise to any gain or...