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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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Implementing a joint share ownership plan ( JSOP) is largely the same as adopting any other share scheme, except that where new shares are created, the share interest is issued at once rather than, as with an option, at a future point. The shares are also held jointly by the employee and a third party, as co-owners in law. Why establish a JSOP? Although JSOP awards offer an advantage comparable to a market value share option for recipients, when arranged and operated correctly and consistently, any profit realised under a JSOP award should fall within capital gains tax rather than income tax and National Insurance contributions. For more commercial reasons for JSOPs, see the Practice Note: Introduction to JSOPs— Commercial rationale. Who is the joint owner? The employee beneficially holds shares together with a third party (in substance, as ‘tenants in common’). Shares are commonly held jointly by an...
What is a joint venture? A joint venture ( JV) is a business arrangement between two or more separate parties under which each agrees, typically for a limited period, to create a new vehicle by putting in equity or other assets. In this Practice Note, that new vehicle is called the joint venture company ( JVCo). Control of the JVCo is exercised by the parties, who therefore usually divide income, costs and ownership. JVs can be structured in different ways. For instance, it may run through a distinct JV vehicle, most often a limited liability company or a partnership. Alternatively, in its simplest form it is merely a pact between the participants, the JV parties ( JVPs), in which no separate legal person is formed and the association rests purely on contract. For further, more general information on JVs, see Practice Note: Setting up a...
Basic structure of a JSOP The basic structure of joint ownership features two holders: the employee participant, who takes the growth interest, and the co-owner, who retains the remaining interest in the shares. In most cases, the co-owner is the trustee of an employee benefit trust ( EBT) set up by the company, either expressly to support the jointly owned share arrangement or as a general employee share ownership trust. For this practice note, it is assumed that the co-owner is an EBT trustee. For wider background on joint share ownership plans ( JSOPs), see Practice Note: Introduction to JSOPs. Funding the acquisition of the jointly owned shares The EBT trustee is usually funded by the company. There are multiple ways to finance this, and each method brings different consequences and...
The main charge on earnings and the residual benefits charge When an employee or director acquires, holds, or disposes of shares or other securities by reason of their employment, one or more income tax charges on employment income may apply. These key charges relate to: earnings—the Weight v Salmon charge residual benefits employment-related securities notional payments giving rise to income tax: payable by the employer through pay as you earn ( PAYE), and not repaid by the employee to the employer within 90 days after the close of the relevant tax year (referred to in this note as notional payments not made good) The charges on earnings and on residual benefits are outlined below. They are especially pertinent where an...
For broader guidance on share incentive plans ( SIPs), see Practice Note: What is a SIP? For an overview of save as you earn ( SAYE) schemes, see Practice Note: How SAYE schemes work and key features. Legislation governing SIPs and SAYEs—registration and filing requirements The statutory requirements for SIPs and SAYE schemes are set out in separate schedules to the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003): ITEPA 2003, Sch 2 applies to SIPs and ITEPA 2003, Sch 3 applies to SAYE schemes. In this Practice Note, these are termed ‘ Schedule 2’ or ‘ Schedule 3’, as appropriate—or ‘the applicable schedule of ITEPA 2003’. The provisions dealing with registration and filing are found as follows: for SIPs, in ITEPA 2003, Sch 2 Pt 10, paras 81A–81K, and for SAYE schemes, in ITEPA 2003, Sch 3 Pt 8, paras...
This Practice Note is aimed at private-sector commercial organisations in the UK. It explains the Information Commissioner’s Office ( ICO) expectations for securing, recording and managing consent to process personal data, and mirrors UK General Data Protection Regulation ( UK GDPR) requirements concerning consent... What is consent? Consent is a freely given, specific, informed and unambiguous sign of the data subject’s wishes whereby they, by a statement or a clear positive action, confirm agreement to the processing of personal data. Accordingly, consent must be: freely given specific informed unambiguous There are two levels of consent based on the type of data processed: standard consent, required when relying on consent to process non-sensitive personal data explicit consent, required when relying on consent to process special category (sensitive) personal data—there is no definition of explicit consent but see Practice Note: How to...
ARCHIVED: This Practice Note is archived and no longer updated. It summarises the Finance Act 2021 ( FA 2021), which obtained Royal Assent on 10 June 2021. Kept for historical reference, it traces the legislation’s route through Parliament and outlines each provision in the Act, with relevant links The tracker is split into two parts: Progress of FA 2021 FA 2021—measure by measure For an overview of the draft Finance Bill 2020–21 published on 21 July 2020, see News Analysis: Draft Finance Bill 2020–21— Tax analysis. For an overview of the further provisions released on 12 November 2020, see News Analysis: Further provisions for draft Finance Bill 2021— Tax analysis. For details of measures announced on Budget day, 3 March 2021, see News Analysis: Spring Budget 2021— Tax analysis. For comprehensive monitoring of the consultations mentioned, see: Tax—consultation and legislation...
ARCHIVED This Practice Note is archived and no longer updated. It covers the Finance Act 2017 ( FA 2017), which obtained Royal Assent on 27 April 2017. Kept for historical reference, it traces the legislation’s passage through Parliament and summarises each measure in the Act with relevant links. For details on the Finance ( No 2) Act 2017—containing provisions removed from FA 2017 on 25 April 2017 following the announcement of the 2017 general election—see Practice Note: Finance ( No 2) Act 2017—progress through Parliament [ Archived]. For full tracking of the consultations referenced, see: Tax—consultation and legislation tracker. Contents Progress of FA 2017 FA 2017—measure by measure Measures anticipated but omitted from FA 2017 or the Finance ( No 2) Act 2017 Progress of FA 2017 This section of the tracker records FA 2017’s movement through Parliament. 5 December 2016 — Draft...
This Practice Note explores the FCA Handbook’s rules and guidance on remuneration incentives set out in Chapter 19F of the Senior Management Arrangements, Systems and Controls sourcebook ( SYSC 19F). SYSC 19F contains four categories of remuneration incentives: Mi FID remuneration incentives ( SYSC 19F.1); IDD remuneration incentives ( SYSC 19F.2); funeral plan remuneration incentives ( SYSC 19F.3); and public offer platform remuneration incentives ( SYSC 19F.4). Application of remuneration incentives rules SYSC 19F.1 applies to: common platform firms, excluding collective portfolio management investment firms Mi FID optional exemption firms third-country firms, but only for activities undertaken from a UK establishment SYSC 19F.2 applies to an insurance distributor that carries on insurance distribution activities from an establishment maintained by it, or by its appointed representative, in the UK. SYSC 19F.3 applies to any firm engaged in regulated funeral plan...
Reporting employment-related securities to HMRC Employers, and any other responsible persons, must supply specified details to HMRC about reportable events involving employment‑related securities or options held by employees or directors who are UK resident for tax purposes or perform duties in the UK, or who are expected to become UK resident or to undertake UK duties while holding such securities or options. That information must be delivered: online to HMRC, unless HMRC permits the return to be made in another way by 6 July following the end of the tax year in which the event occurred, unless HMRC announces an extension, for example where there have been technical issues with the system All companies operating employee share incentives for their staff, whether or not they are tax‑advantaged, must register those arrangements online with HMRC and also submit annual returns for them by 6 July each year....
The law governing EMI options EMI options are regulated by the following provisions in the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003): sections 527–541 of ITEPA 2003; and ITEPA 2003, Sch 5 Pt 1– Sch 5 Pt 8 What are EMI options? The EMI scheme is a highly adaptable and tax-efficient share option arrangement created specifically for small/medium-sized companies, and can operate as a powerful incentive for companies. EMI schemes are among the most popular and tax-efficient methods to incentivise a company’s employees; however, the qualifying conditions are strict, and so EMI may not be available (or appropriate) for a given company, taking into account its size, structure, employees and/or objectives. EMI options must be granted for genuine commercial purposes—to recruit or retain an employee within a company—and not as part of any scheme or arrangement where the main purpose (or one of the...
Introduction A tax indemnity allows an employer to recoup income tax and National Insurance contributions ( NICs) from an employee, typically through a range of methods to keep flexibility for both sides. Within share schemes, they are especially significant because an employer may need to settle substantial sums with HMRC and, without a binding recovery mechanism, could be left exposed. Where income tax becomes due on employment related securities or options, an employer may still be required to account for that tax to HMRC even if no cash is received. Generally, this duty arises where the securities are ‘readily convertible assets’ ( RCAs) or deemed RCAs at the time of the taxable event, or where the employee receives cash or RCAs in connection with them. For further guidance on when shares constitute RCAs, see Practice Note: Share options and readily...
Post-acquisition benefits This Practice Note addresses the provisions in sections 447–450 of the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003) ( Part 7, Chapter 4), which impose income tax on employees or directors for post-acquisition benefits received in connection with employment-related securities. For these purposes, benefits are interpreted broadly and can include, for instance, enhancements to share rights, the provision of travel or accommodation, and an allotment of bonus shares. For the meaning of employment-related securities, see Practice Note: What is an employment-related security? Following the Court of Appeal’s judgment in PA Holdings, HMRC may contend that dividend payments are simply taxable as earnings (or emoluments) under (what is now) ITEPA 2003, s 62 rather than under the specific post-acquisition benefits charge (see News Analysis: Employee remuneration and special purpose vehicles). Nevertheless, the...
The need to value employee shares When contemplating offering shares to employees, whether directly and/or via a share plan, employer companies and existing shareholders must reflect on what the shares are worth for several reasons, including: determining how many shares are needed to meet their objectives (valuing existing shares can indicate a need to sub-divide current shares and/or establish a new class) assessing the tax that may arise on acquisition and on any later chargeable events (for example, for PAYE purposes and/or to enable an employee and the company to decide whether to make an election in relation to restricted shares), particularly in respect of: convertible securities restricted securities securities with artificially depressed or enhanced market values ...
Specific income tax rules Specific income tax provisions (sections 471–484 of the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003)) are applicable to securities options connected with employment. These provisions generally subject non tax-advantaged share options to an income tax charge. Different rules govern tax-advantaged arrangements such as EMI options, SAYE schemes and CSOPs. A securities option is, in essence, a bare right to acquire securities, conferring no other rights. Comprehensive guidance appears in Practice Note: Employment-related securities options—definition, covering: what constitutes a securities option when a securities option is regarded as employment-related That Practice Note also sets out the tax treatment of employment-related securities options, which in brief is: no income tax or National Insurance contributions ( NICs) arise on the grant of an option on exercise or another chargeable event: the...
Convertible securities are: employment-related securities (see Practice Note: What is an employment-related security?) securities that can be converted into instruments of a different description (see below) Accordingly, if a company grants securities to its employees or directors with restricted rights on issue (for example, no dividend entitlement or voting powers) but which may switch into ordinary shares on specified trigger events, those instruments constitute convertible securities. They are often seen in private equity or venture capital settings and include: convertible loan notes convertible preference shares For information on the income tax treatment of convertible securities, see Practice Note: Convertible securities—tax treatment. For the PAYE and National Insurance contributions ( NIC) consequences of convertible securities, see Practice Notes: PAYE implications of employment-related securities and NICs implications of employment-related securities and securities options. What are convertible...
Why not just reward staff with cash? Paying cash can be a straightforward, less onerous way to recognise and incentivise employees. However, this Practice Note explores the advantages and disadvantages of share schemes as a broad concept. For fuller guidance on the pros and cons of each specific scheme, see Practice Note: The advantages and disadvantages of each share incentive arrangement. This Practice Note covers: why companies implement share schemes what types of share schemes exist the advantages of share schemes (from both company and employee perspectives) the disadvantages of share schemes (from both company and employee perspectives) use of share schemes Why do companies implement share schemes for their employees? There are many reasons why companies choose to introduce employee share schemes, and these often reflect the organisation’s size and its particular objectives......
It is fundamental to ensuring the arrangement meets the company’s specific needs and objectives. This Practice Note aims to assist in pinpointing a company’s stated objectives so as to determine the most fitting share scheme arrangement for it. Types of schemes For the purposes of this note, the following categories of share scheme arrangements will be examined and evaluated against each objective: unapproved share option schemes enterprise management incentives ( EMI) schemes company share option plans ( CSOPs) share incentive plans ( SIPs) save as you earn/sharesave ( SAYE) schemes long term incentive plans ( LTIPs) growth or value share arrangements joint share ownership plans ( JSOPs) phantom share plans Company objectives Set out below are questions to help a company identify the most appropriate share incentive arrangement to meet its aims: Should the scheme be extended to all eligible employees, or offered only on a discretionary basis? Is the arrangement intended for employees alone, or both...
Why do companies have reorganisations? Groups of companies carry out reorganisations for numerous and varied reasons. These steps will frequently have implications for existing share plans and other employee equity arrangements. In some instances, the consequences are commercial in nature. Examples include: the reorganisation prompting early vesting, exercise and/or lapse of awards because the relevant provisions in the share plan rules on a change in control of the parent company, or on the participant’s employment ending, have been engaged; and a requirement for awards over shares in the current parent to be swapped for awards over shares in a newly formed parent company. In certain situations, if the right steps are not taken within a defined period, valuable tax advantages may ultimately be lost entirely. Common types of reorganisation The most frequent forms of reorganisation include the...
March 2023 ARCHIVED: This Practice Note is archived and no longer under maintenance...
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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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