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This Practice Note outlines the law concerning criminal recklessness. The subjective test for recklessness Certain statutory and common law offences allow the prosecution to prove mens rea through ‘recklessness’. Put simply, recklessness is where the accused takes an unjustified risk that results in unlawful harm or damage. The House of Lords in R v G reaffirmed the subjective approach to recklessness. Before R v G, two distinct tests were used, depending on the offence charged: Subjective recklessness from R v Cunningham: the prosecution had to establish that the accused personally foresaw the risk. Objective recklessness from R v Caldwell: the prosecution only needed to show that the risk would have been obvious to a reasonable person, without proving the accused themselves foresaw it. In R v G, the House of Lords concluded that the objective test could operate unfairly where a defendant did not foresee the
This Practice Note examines the remedy of rescission, explaining when and in what manner a contract can be unwound (at common law, in equity and under statute) and thereby terminated and brought to an end. It covers the consequences and effects of rescission, the principal grounds for setting aside an agreement (misrepresentation, mistake, undue influence, duress, non‑disclosure, fiduciary misdealing and bribery) and the main obstacles to claiming rescission—affirmation, the intervention of third‑party rights and the impossibility of restitution. For further guidance on rescission in the context of misrepresentation, see Practice Note: Misrepresentation—rescission as a remedy. There are many ways in which a contract may reach its end; see: Terminating contracts—how and when a contract ends—overview for a brief and accessible summary, with links to the related further practical guidance, including Practice Note: Termination and expiry of contracts. For a table
What is a res judicata? A res judicata is a determination by a court or tribunal with jurisdiction over the cause of action and the parties, which finally disposes of the issues decided so they cannot be litigated again by those bound, save on appeal. Final judgments entered by default or by consent fall within this concept, whereas rulings on purely procedural points and any decision lacking finality do not. The doctrine’s aim is to bring litigation to an end and shield parties from being harassed by the same dispute twice. in personam—binds the parties and their privies in rem—binds all persons, privy or otherwise (ie a judgment binding the whole world) A party may rely on res judicata: as an estoppel to defeat an opponent’s claim or defence; and/or as the basis of their own claim or
The offence of causing grievous bodily harm with intent Wounding or causing grievous bodily harm (GBH) with intent can be tried solely in the Crown Court on indictment. Elements of the offence Under the Offences against the Person Act 1861 (OATPA 1861), the prosecution must establish that the defendant unlawfully and maliciously: wounded with the intention of causing GBH, or caused GBH with that intention, or wounded intending to resist or prevent the lawful arrest or detention of any person, or caused GBH intending to resist or prevent the lawful arrest or detention of any person ‘Unlawfully’ and ‘maliciously’ Unlawfully The wounding or causing of GBH must be unlawful. Such conduct may be lawful if used: in self-defence in defence of another in defence of property for the prevention of crime where the victim gave express or implied consent For further information on these defences, see below:
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Practice Note: bonus plans for employees and directors This Practice Note explores how bonus arrangements operate for employees and directors. It considers the two principal forms of scheme: discretionary and contractual. It looks closely at discretionary awards, covering eligibility, the exercise of discretion, limitations and expectations. The Note also addresses tax aspects of bonus plans and what follows when they are ended. It sets out points relevant to scheme design, drafting issues and regulatory matters, including compliance with the UK Corporate Governance Code. Finally, it considers how pregnancy or maternity leave, part-time or fixed-term status, long‑term sickness and linked discrimination concerns affect bonus schemes and payments, available remedies, and the routes for bringing bonus claims in the employment tribunal or the court. Bonuses can strongly motivate and help retain staff while enabling employers to manage wage costs. In some sectors and...
FORTHCOMING CHANGE: This Practice Note sets out the law as it currently stands, though elements could be affected by the Digital Omnibus proposals released on 19 November 2025 under the European Commission’s ‘simplification’ agenda. For details, see Practice Note: EU Digital Omnibus—tracker. It introduces the EU’s General Data Protection Regulation, Regulation ( EU) 2016/679 ( EU GDPR), and the United Kingdom General Data Protection Regulation, Assimilated Regulation ( EU) 2016/679 ( UK GDPR). The UK data protection law collection and the EU data protection law collection compile further core guidance on these regimes and are recommended starting points for research. In brief, data protection law across the EEA (the EU together with Iceland, Norway and Liechtenstein) and the UK aims to ensure that information about living individuals (‘personal data’) is treated fairly and responsibly. To that end, both EEA and UK data protection laws impose...
This Practice Note focuses on the conditions that must be met in relation to companies granting the EMI options. The EMI regime is tightly defined and prescribes multiple criteria that must be satisfied at the point options are granted. These relate to: the company issuing the options the employees to whom the options are granted the shares placed under option the options themselves Company-specific conditions are set in the context of the income tax relief available under sections 527–541 of the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003). For a visual guide to assess whether a company can grant EMI options, see: EMI scheme—flowchart to determine company's eligibility. To help confirm whether a company and its employees qualify to grant or receive EMI options, see: EMI options—checklist to determine whether a company and its employees qualify; and for a...
Introduction to EMI schemes The enterprise management incentives ( EMI) scheme is a highly adaptable and tax-efficient arrangement created for small/medium-sized companies. Among the share option routes available to businesses, EMIs are among the most widely adopted. Chosen employees receive an option to acquire company shares at a set price, should they decide to proceed and exercise the option. Commonly—but not always—the exercise price mirrors the market value of the shares at the point the EMI option is granted. There is no requirement for an employee to exercise the option. Although EMIs can deliver significant tax efficiency when implemented correctly, the rules to qualify to grant, and to be granted, EMI options are notably strict. This Practice Note outlines the eligibility conditions for EMIs. For fuller guidance, see Practice...
This Practice Note This Practice Note addresses the particular provisions in sections 446X–446Z of the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003) ( Part 7, Chapter 3D) that bite where employment-related securities are disposed of for more than their market worth. The measures extend to all forms of employment-related securities, regardless of whether they are restricted, convertible, or obtained under a securities option (see Practice Note: What is an employment-related security?). They rest on the premise that shares or other securities would ordinarily be sold at market value, so any element of consideration above that level must derive from their employment connection. Accordingly, an income tax exposure (and potentially National Insurance contributions ( NICs)) arises on the excess over market value for the relevant employee or director (and the employing company may owe employer’s NICs). This income tax...
Employment-related securities and securities options An employment-related security is, in broad terms, any security—covering shares, certain insurance contract rights, debt, derivatives, warrants, and stakes in investment partnerships and other collective investment schemes—where the chance or right to obtain that security (or an interest in it) arises by virtue of the individual’s employment, or someone else’s employment. Whether securities are employment-related determines the tax treatment on acquisition, on disposal, and throughout ownership. This Practice Note examines how the income tax charging provisions interact with the capital gains tax ( CGT) framework on disposals of employment-related securities. Share options are not categorised as employment-related securities; for tax purposes they are called ‘securities options’, although options are very often granted over employment-related securities. For more on the definition, see Practice Note: What is an employment-related security? The capital gains tax regime When an individual sells or otherwise disposes of an asset for a...
This Practice Note explains the income tax treatment of convertible securities The meaning of convertible securities is provided in Practice Note: Convertible securities—definition. In broad outline, the regime for convertible securities (or interests in them) as found in Chapter 3, Part 7 of the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003) operates by viewing the security itself and the conversion right as two distinct assets. Income tax liabilities may arise: on acquisition of the convertible securities, calculated by reference to the value of the underlying securities while disregarding the conversion right, and on a later chargeable event, being: conversion of the convertible securities disposal of the convertible securities, and/or a change in description (as opposed to class) of...
This Practice Note clarifies when a secondary contributor can, and cannot, recover employer’s NICs from an earner (that is, an employee or director). For ease, it uses the terms ‘employer’ and ‘employee’ instead of ‘secondary contributor’ and ‘earner’. The core statutory framework for NICs is found in the Social Security Contributions and Benefits Act 1992, with the principal secondary rules set out in the Social Security ( Contributions) Regulations 2001 ( SI 2001/1004). For current NICs rates and thresholds, see Practice Note: Key UK tax rates, thresholds and allowances. For when primary and secondary Class 1 NICs and Class 1A NICs arise in relation to employment‑related securities and securities options, see Practice Notes: NICs implications of employment‑related securities and securities options and Tax and other rates which are relevant to share...
Importance of the definition of employees' share scheme in Companies Act 2006 When putting in place an employee share incentive, it is common to design and draft it so that it qualifies as an ‘employees’ share scheme’ for the purposes of the Companies Act 2006 ( CA 2006). The reason is that several CA 2006 constraints do not apply to such schemes, allowing companies to rely on relevant exemptions when operating their employee equity arrangements. In practice, the carve-outs most frequently used relate to CA 2006 provisions on: the allotment of shares and the granting of options over shares share pre-emption rights financial assistance requirements (subject to specified conditions) the transfer of treasury shares the buy-back of a company’s own shares There are also consequences of a scheme being an employees’ share scheme under the UK Listing...
IMPORTANT NOTE: The ability to offer tax-favoured employee shareholder shares or ESS (commonly used in private equity company arrangements) has now been removed. In the Autumn Statement 2016, the government confirmed the withdrawal of these ESS-related reliefs: Income tax and NICs relief on the first £2,000 of employee shareholder shares issued to an individual The capital gains tax exemption covering all or part of ESS shares The rule that, when a company buys back employee shareholder shares, the payment is not treated as a distribution in the shareholder’s hands These measures apply to any employee shareholder agreements entered into on or after 1 December 2016. However, individuals who received independent advice about entering such an agreement before 23 November 2016 could still complete it before 1 December 2016 and keep the beneficial income tax and CGT treatment. Likewise, anyone who obtained independent advice on 23 November 2016 before 1.30 pm...
Archived: The option to grant tax‑advantaged Employee Shareholder Shares ( ESS), often used in private equity arrangements, has been withdrawn. In the Autumn Statement 2016, the government confirmed the removal of these ESS-related reliefs: income tax and NICs relief on the first £2,000 of ESS received by an individual; the capital gains tax exemption on all or part of the ESS; and the rule that, where a company repurchases ESS from an employee shareholder, the consideration is not treated as a distribution in the shareholder’s hands. These withdrawals apply to any employer shareholder agreements entered into on or after 1 December 2016. However, individuals who obtained independent advice about entering an employer shareholder agreement before 23 November 2016 could still proceed before 1 December 2016 and retain the beneficial income tax and CGT...
A business might need to secure extra capital for a variety of purposes. It could, for example, be to finance a planned acquisition or to satisfy continuing financial commitments. There are several routes by which a company can obtain the extra funding required, including tapping existing shareholders through a rights issue, an open offer or a placing. When running a rights issue, open offer or placing, the company must carefully assess the effect on any current employee share plans it operates. This assessment should take place as early as possible in the decision-making process to determine whether, and if so what, steps can be taken so that employees are not put at an unfair disadvantage by a rights issue, open offer or placing. This Practice Note outlines the key points that typically arise in connection with employee share plans on a rights issue, open offer or...
What is an employee ownership trust? An employee ownership trust ( EOT) is a specific kind of employee benefit trust ( EBT) that must meet statutory criteria. The concept was introduced by the Finance Act 2014 ( FA 2014), together with tax advantages for companies owned by an EOT and for individuals who dispose of shares to an EOT. If the statutory criteria are not met in relation to the EOT, these reliefs will not be available. The reliefs were enacted by FA 2014, Sch 37, following a Budget 2013 announcement and a subsequent consultation. For guidance on pitfalls and common errors when creating or running an EOT, see Practice Note: Pitfalls of setting up and operating an employee-ownership trust. For general information on EBTs, see Practice Note: What is an employee benefit trust? What tax reliefs can an EOT...
What is an employee ownership trust? An employee ownership trust ( EOT) is a distinct type of employee benefit trust that must satisfy specific statutory conditions. The EOT framework was introduced by the Finance Act 2014, together with certain tax advantages available to companies owned by an EOT and to individuals who dispose of shares to an EOT. If those statutory tests are not met in relation to the EOT, these reliefs will not apply. For general information on EOTs, including an overview of the key features and tax reliefs, see Practice Note: Employee ownership trusts. For more on the issues and considerations when selling a company to an EOT, including the necessary documentation and the overall sale process, see Practice Note: Sale of a business to an employee ownership trust. For guidance on a sale by the trustees of an EOT of a...
Background Pursuant to Article 3(1) of Directive 2004/39/ EC, the EU Prospectus Directive ( PD), and section 85(1) of the Financial Services and Markets Act 2000 ( FSMA 2000), making any direct or indirect public offer of transferable securities (including, for example, listed shares) to any person in the UK is generally prohibited unless a prospectus sanctioned by the FCA, or by another EU state’s competent authority, has first been duly published, or a relevant statutory exemption clearly applies. If it is determined that an offer to employees (or ex‑employees) from time to time necessitates a prospectus, a company may, instead, be able to prepare one by relying on a short form disclosure regime. See Practice Note: When is a prospectus needed for an offer to employees (the pre‑19 January 2026 regime)? [ Archived] for a fuller description of when a...
FORTHCOMING CHANGE: As set out at the Autumn Budget 2024, the government initiated an independent review into the loan charge. Formally launched on 23 January 2025, the review’s remit was to examine the obstacles stopping those within scope of the loan charge, who have not yet settled and cleared their tax liabilities in full, from reaching a resolution with HMRC, and to recommend ways in which they might be encouraged to settle with HMRC (see News Analysis: Autumn Budget 2024— Independent review of the loan charge). To inform the review, a call for evidence—targeted at people still subject to the loan charge and their advisers—was issued on 28 March 2025. The Final Report of the review, alongside the government’s response, was published at Budget 2025 on 26 November 2025......
This Practice Note explains how the Investment Association ( IA) remuneration principles apply to employee benefit trust ( EBT). These principles sit within the IA Principles of Remuneration. It describes their application in the EBT context. The IA remuneration principles—key messages Pension funds, insurers and related institutions commonly place their clients’ capital in UK equities. As a result, such institutions form a significant slice of the shareholder base across companies listed on the London Stock Exchange and other markets. Acting for these members, the IA articulates clear expectations on senior executive pay and speaks out on what it regards as important. The IA Principles of Remuneration are broad in scope, spanning numerous dimensions of executive reward and practice. They set out the boundaries its members view as critical when designing pay frameworks and policies, and also address the role of the...
Trading activities test The enterprise management incentives ( EMI) framework is tightly defined and imposes various conditions that must be satisfied when options are issued, covering: the company issuing the options the employees receiving the options the shares subject to the option, and the terms of the options themselves This Practice Note examines the statutory requirements for the trading activities test that a company must meet to award EMI options. It clarifies the meaning of a qualifying trade, drawing attention to pertinent HMRC guidance and practical considerations. For the EMI eligibility tests concerning a company’s independence, qualifying subsidiaries, gross assets and headcount, see Practice Note: EMIs—qualifying companies. For a decision flowchart on a company’s ability to grant EMI options, see: EMI scheme—flowchart to determine company’s eligibility. For a checklist assessing whether a company and its workforce qualify for EMI purposes, see: EMI...
Although the enterprise management incentives ( EMI) qualifying conditions are very stringent, the income tax, National Insurance contributions ( NICs) and apprenticeship levy outcomes for qualifying EMI options can be highly beneficial. This Practice Note outlines the income tax, NICs and apprenticeship levy treatment of qualifying EMI options, as set out in sections 527–541 of the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003). For an account of the capital gains tax treatment of EMI options, see Practice Note: EMI— CGT, which also covers business asset disposal relief and corporation tax relief. For a fuller explanation of the business asset disposal relief rules for EMI options, see the Practice Notes: Business asset disposal relief and enterprise management incentives ( EMI) schemes, together with the Table that summarises the income tax, National Insurance contributions ( NICs), capital gains tax ( CGT) and...
FORTHCOMING CHANGE: On 26 November 2025, as part of Budget 2025, it was confirmed that, with effect from April 2027, the duty to notify HMRC of the grant of EMI options, in order for them to take effect as qualifying options, will be removed. This change will be legislated for in the Finance Bill 2026–27. See: Budget 2025, para 4.40. Enterprise management incentives ( EMI) schemes are tax-advantageous discretionary share option arrangements widely used across the UK. EMI schemes have the potential to deliver very generous tax treatment and to allow for generous individual awards. Nevertheless, the EMI statutory criteria are stringent, and the grant notification requirement is essential to ensuring that EMI tax status is not forfeited......
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This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...
Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...
I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...
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