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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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HMRC's online Trust Registration Service ( TRS) HMRC’s online Trust Registration Service ( TRS) was created to give effect to the Money Laundering, Terrorist Financing and Transfer of Funds ( Information on the Payer) Regulations 2017 ( MLR 2017), SI 2017/692, and to further HMRC’s digital agenda for tax transparency. MLR 2017, SI 2017/692 was later amended by the Money Laundering and Terrorist Financing ( Amendment) ( EU Exit) Regulations 2020 ( MLR 2020), SI 2020/991. Together, MLR 2017 and MLR 2020 implement the EU’s Fourth Anti- Money Laundering Directive ( EU) 2015/849 (4MLD) and Fifth Anti- Money Laundering Directive ( EU) 2018/843 (5MLD). On 15 March 2021, HMRC confirmed that the original 10 March 2022 deadline for registering trusts with the TRS, where registration is required by 5MLD and MLR 2020, SI 2020/991, would be pushed back by roughly 12 months from the...
Introduction and context This Practice Note provides a summary of the taxation of internationally mobile employees in relation to securities options ( Options) charged to tax within Chapter 5 of Part 7 of the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003). On 30 October 2024, as part of the Autumn Budget 2024 announcements, the Labour government confirmed that it would proceed with the former Conservative government’s plans to abolish the remittance basis of taxation and replace it with a residence‑based regime, scheduled to commence on 6 April 2025. These changes were enacted through Finance Act 2025 ( FA 2025) and have also affected, in particular, the availability and operation of overseas workday relief. This Practice Note reflects the current position under the new tax regime; however, the previous regime is still relevant for Options granted before 6 April 2025, because any...
STOP PRESS: Abolition of non-dom regime and remittance basis of taxation from 2025–26 The Finance Act 2025 has scrapped the remittance basis and, from 6 April 2025, substitutes a residence-based system. The reforms bring in a new Foreign Income and Gains ( FIG) regime and revise the rules for overseas workday relief. For detailed guidance on these updates, refer to Practice Note: The abolition of the remittance basis of taxation from 2025–26. The UK operates a comprehensive framework for taxing employment income. This Practice Note explains the core income tax principles for employment income and the way they attach to earnings. Keep in mind that any form of remuneration connected to an individual’s employment can give rise to income tax and National Insurance contributions ( NICs) liabilities (for NICs, potentially affecting both employer and employee), together with possible...
The company establishing a SIP The company setting up a share incentive plan ( SIP) does not need to be the same entity whose shares are allocated. However, both: the shares to be granted, and the connection between the SIP-establishing entity and the company whose shares are issued must satisfy the relevant legislative conditions. A SIP can be created either: solely for employees of the company that establishes it; or for those employees and for employees of other companies it controls (a group plan)—see Constituent companies below. In a group where the parent company’s shares are to be awarded, there are two options: the parent company may establish the SIP and extend it to the appropriate subsidiaries; or each subsidiary may establish its own SIP, provided the other statutory requirements concerning the shares under award are met—see...
Terminology Under the SIP code—the legislation that governs the terms and requirements of Share Incentive Plans ( SIPs) and sets out the available tax reliefs—the expression ‘award of shares’ describes shares that are either allocated to employees or acquired on their behalf on a particular occasion. Accordingly, when multiple employees receive shares at the same time pursuant to the same invitation, each individual is regarded as having taken part in the same award of shares. As dividend shares are not, in strict terms, ‘awarded’, they are excluded from the meaning of an ‘award of shares’ in paragraph 5, Part 1 of Schedule 2 to the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003), and therefore the eligibility requirements do not extend to dividend shares. All-employee nature of the SIP It is a fundamental principle of a SIP that it is operated on an...
ARCHIVED : This Practice Note has been archived and is not maintained. This Practice Note brings together detailed analysis of the principal milestones in the 2015/16 Budget and Finance Bill process. It also offers commentary on Autumn Statement 2015, the draft Finance Bill 2016, Budget 2016 and Finance Bill 2016. For a detailed explanation of the annual Budget and Finance Bill process, including procedural aspects of enacting a Finance Act, see: Practice Note: The Budget and Finance Bill process. Finance Act 2016 Royal Assent to the Finance Act 2016 was formally granted on 15 September 2016, after its passage through the House of Lords concluded on 13 September 2016. Finance Bill 2016 Finance Bill 2016 (formally, Finance ( No.2) Bill 2015–16) was issued, along with explanatory notes, on Thursday, 24 March 2016. For comprehensive tracking of the Finance Bill measures, including summaries and analysis of the principal tax...
FORTHCOMING CHANGE relating to the rates of business asset disposal relief ( BADR): Following announcements at the Autumn Budget 2024, the capital gains tax rate applying to disposals qualifying for business asset disposal relief ( BADR) is set to rise to 18% for disposals completed on or after 6 April 2026, aligning with the lower main capital gains tax rate. This comes after an interim increase to 14% (up from 10%) for disposals occurring on or after 6 April 2025. Legislation implementing these changes has been included in the Finance Act 2025. A management buyout (often termed an ‘ MBO’) is the purchase of a business by its existing management team (or selected members of that team), usually with private equity-backed finance. Under such arrangements, the private equity investor acquires a stake in the business (typically a majority interest), and the incumbent...
Earn-outs An earn-out is a distinct method of structuring the consideration on a share acquisition, under which part of the purchase price is set by reference to the target’s performance during a defined period after completion of the acquisition. In deals that include an earn-out, the amount paid by the buyer for the shares will usually comprise: an agreed, initial sum of consideration payable on completion of the sale; and a contingent, unascertainable earn-out amount payable over, or at the end of, the agreed earn-out period The initial consideration and the earn-out consideration can be satisfied wholly in cash, in shares or loan notes issued by the buyer (or a connected company), or in any combination thereof. The earn-out component is often calculated by reference to the target company’s profits over a specified span, for example the next two or three accounting periods following completion of the...
As this Practice Note outlines, termination payments come in numerous forms, and the first task at the outset is to determine whether the particular payment is chargeable as earnings under section 62 of the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003), or instead falls within alternative charging provisions in ITEPA 2003, before assessing if the £30,000 exemption in ITEPA 2003, s 403, can apply to that payment in the circumstances. In everyday understanding, 'tax' typically embraces National Insurance contributions ( NICs), because NICs reduce disposable funds much like conventional taxation. Accordingly, the NICs consequences must be weighed when judging the financial efficiency of any such payment. However, as NICs are governed by their own statutory regime, which does not mirror the tax code, their treatment should always be addressed separately when reviewing a termination payment. This separation ensures clarity and helps...
To many, the formal announcement of a bidder’s firm intention to make an offer for a company’s shares signals the start of a takeover. For those managing the target’s share plans, however, the starter’s pistol sounds weeks earlier, at the point of the initial approach to the target. The timeframe from that pre-announcement stage through to completion is overseen by the Takeover Code. From 3 February 2025, the Code will apply to offers for, broadly, any company listed or admitted to trading on a UK regulated market, a UK multilateral trading facility, or any stock exchange in the Channel Islands or Isle of Man (including a company that until recently had such a listing or admission) with its registered office in the UK, the Channel Islands or the Isle of Man. This amounts to a narrowing of the Code’s scope compared with its reach...
Offering share options to employees internationally Firms with staff spread worldwide must decide how consistent and harmonised their employee share option scheme should be. It is not a yes-or-no choice, but a spectrum. The decision involves weighing administrative simplicity and fairness against meeting local obligations and expectations in each location. At one end sits a rigid single-plan-for-all with no local tailoring; moving along the range you permit degrees of localisation, through to the far end where there might be a distinct plan per country (or clusters of countries). Each point on that continuum alters effort and the plan’s operation in practice. A universal model is often simpler to run, delivering uniformity and parity among employees, yet it may trigger local compliance challenges. Creating separate local plans enables a business to satisfy domestic requirements and align with employee expectations. The downside is divergent...
Residence The UK’s first formal tax residence test for individuals, the statutory residence test ( SRT), came into force on 6 April 2013. Before that date, whether someone was tax resident in the UK was decided through a mixture of case law, practice and HMRC guidance, which produced significant uncertainty—see Practice Note: Residence before 6 April 2013 [ Archived]. This Practice Note: explains the principal features of the SRT, and summarises: the basic rule the automatic overseas tests the automatic UK tests the sufficient ties test This Practice Note, and the additional Practice Notes on the SRT, provide only a summary and are not comprehensive. Inevitably, some...
FORTHCOMING CHANGE: Following the 2020 call for evidence, the 2021 outcome, subsequent consideration by the relevant HMRC and industry working group, and a 2023 consultation, the government confirmed in its consultation outcome of 28 April 2025 that, from 2027, stamp duty and SDRT will be replaced by a single self-assessed stamp tax on securities, broadly reflecting the proposals in the 2023 consultation document. As further confirmed at Budget 2025 on 26 November 2025, this new single tax—called the Securities Transfer Charge—will be self-assessed and paid (and reported) through a new online portal. For more information, see: News Analyses: Tax update spring 2025— Stamp taxes on shares modernisation Tax update spring 2025— Tax analysis— Stamp and transfer taxes TAMD 2023— Stamp taxes on shares modernisation TAMD...
The statutory rules for share incentive plans ( SIPs) set out strict parameters for the type of trust that must run alongside a SIP and for what trustees may and may not do. Accordingly, when a new SIP is brought in, it will almost always require a fresh trust to be set up at the same time to support it. This Practice Note explains the requirements that govern SIP trusts, together with the duties and limitations placed on the trustees of those trusts. Requirement for trustees The trust sits at the heart of a SIP. To operate, a SIP must appoint a trustee body made up of UK‑resident persons. Consequently, every trustee—individual or corporate—has to be UK‑resident. Many listed companies opt for a single professional corporate trustee; alternatively, trustees may comprise a group of at least two individuals or a company...
What are performance conditions and why might they need amending? A performance condition is a pre-determined requirement that must be met before an award holder can realise value from an option or award, and is therefore usually tied to vesting or, where relevant, the exercisability of the option. These conditions may cover a range of measures, most commonly: overall performance of the company results of a particular division or business unit (ie the area in which the employee works) the individual performance of the employee award holder the performance of a specific team (whether a project team or a permanent team) Performance conditions can be set on an absolute or relative basis. For instance, company performance measures might be absolute (assessed against the company’s own targets) or relative (benchmarked against a peer group or a market index such as the FTSE 100). For...
This Practice Note outlines the principal UK tax rates, thresholds and allowances. It is intended as a quick reference, not an exhaustive source. It covers the primary rates, thresholds and allowances for UK resident individuals and companies. For historical data and more detail, refer to Whillans's Tax Tables. For broader information beyond the areas most relevant to share incentive lawyers, see the Practice Notes: Key UK tax rates, thresholds and allowances and Key UK tax rates, thresholds and allowances for Private Client. Income tax Income tax rates for individuals For participants in share incentives, the following income tax rates and bands apply: Starting rate for savings only: 0%; limit £5,000 in 2024–25 and 2025–26 Basic rate: 20%; band £0–£37,700 in 2024–25 and 2025–26 Higher rate: 40%; band £37,701–£125,140 in 2024–25 and 2025–26 Additional rate: 45%; over £125,140 in 2024–25 and 2025–26 These bands apply after the personal allowance of...
Private equity backed companies The challenges encountered by private equity backed businesses when deploying shares to motivate staff broadly mirror those experienced by other organisations. Nonetheless, these entities have certain distinctive characteristics that warrant attention. Private equity deals are commonly arranged through a parent company that, in turn, owns shares in the trading company. It is also frequent to see one or more intermediary holding companies positioned between the top holding entity and the trading company. The ultimate owners of the holding company, alongside management investors, will typically comprise one or more partnerships or investment funds. Control: Qualifying to grant tax-advantaged options Depending on the stake held by a private equity investor, and the control rights conferred by the company’s articles of association and any investment agreement, the company that issues the shares (the 'issuing company') may be regarded as controlled by another company. This...
ARCHIVED: This Practice Note is archived and not maintained. This year’s round-up surveys several headline developments from 2017 and looks ahead to what 2018 may bring. It covers changes to employee shareholder shares, salary sacrifice structures and disguised remuneration using employee benefit trusts ( EBTs) arising from the Rangers case. It also highlights updates to Lexis+® UK’s content, sharing news of notable advances over the last year and what is scheduled in the coming 12 months. Reviewing 2017 Employee shareholder shares What happened? After the government set a £100,000 cap for Capital Gains Tax ( CGT) relief in March 2016—considerably diminishing the appeal of employee shareholder shares ( ESS) for both employers and employees—the Finance Act 2017 abolished the CGT exemption and the income tax and National Insurance contribution ( NIC) reliefs for shares granted as consideration under ESS agreements entered into on or after 1 December...
The impact of capital reorganisations, takeovers and demergers on awards made under a share incentive plan ( SIP) SIPs are more intricate than other tax-advantaged arrangements when capital reorganisations, takeovers or demergers occur, because participants own shares through SIP trustees rather than holding options. By contrast, for option schemes a share capital reorganisation that does not involve a takeover typically has little or no effect on outstanding options, as any movement in the company’s share price is slight, or participants’ economic position can be protected by adjusting the number of option shares and the exercise price. With SIP awards, the trustees will generally need to take steps, and they may require directions from participants. There are also defined rules about which assets may sit within the SIP after a reorganisation, so choices made can influence a participant’s tax position. The treatment of SIP awards on a...
SIP As the sole tax‑favoured share plan, a SIP allows participants to potentially realise unlimited growth in their shares without incurring income tax, National Insurance contributions ( NICs) or capital gains tax ( CGT). For all other tax‑advantaged arrangements—enterprise management incentives ( EMI), save as you earn ( SAYE) and company share option plans ( CSOPs)— CGT can arise on the increase in share value from the date the options were granted. By contrast, where an individual keeps their SIP shares within the plan until disposal, no CGT is payable on that disposal. Do note that if a disqualifying event occurs in respect of a SIP, the preferential tax treatment for SIPs will not apply to any awards made after that point. For more information, see Practice Note: SIPs—qualifying companies and type of shares— Restrictions on shares and...
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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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