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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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This note addresses the following areas: the law governing save as you earn ( SAYE) options and corporate events corporate events which may trigger the exercise of SAYE options demergers tax relief for exercise of SAYE options on specified corporate events, and exchange of SAYE options The law governing SAYE options and corporate events The statutory framework setting out how corporate events affect SAYE options comprises: Schedule 3 Part 6, paragraph 37 to the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003) and ITEPA 2003, Sch 3 Pt 7, paras 38–39, and ITEPA 2003, s 519 Corporate events which may trigger exercise of SAYE options Under the SAYE rules, a scheme may permit options to be exercised early (before the bonus date of the associated savings contract) if any of the following arises in respect of the...
This Practice Note covers the following topics: the legal framework for exchanging save as you earn ( SAYE) options exchange of SAYE options the circumstances and timing in which an exchange may occur conditions applying to the replacement options tax treatment of any exchange practical considerations for SAYE rollovers The law governing the exchange of SAYE options The statutory provisions setting out the terms on which SAYE options can be exchanged following a corporate event are found in paragraphs 38–39, Schedule 3, Part 7 to the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003). For general guidance on SAYE options, see Practice Note: How SAYE schemes work and key features. For the effect of a...
What is an employee ownership trust? An employee ownership trust ( EOT) is a type of employee benefit trust that meets defined statutory conditions within tax legislation. The Finance Act 2014 brought in specific tax advantages available to companies owned by an EOT and to individuals disposing of shares to an EOT. For general information on EOTs, including an outline of the key features and tax reliefs, see Practice Note: Employee ownership trusts. For a review of common pitfalls, and mistakes or misconceptions that can arise when creating or running an EOT, see Practice Note: Pitfalls of setting up and operating an employee ownership trust. This Practice Note addresses selected tax and practical issues that may arise where the trustees of an EOT sell a company already owned by that EOT. For further detail on the considerations involved in an initial sale of a company to an EOT, see...
FORTHCOMING CHANGE: On 26 November 2025, within Budget 2025, the government confirmed that from April 2029, only the first £2,000 a year of pension contributions made under a salary sacrifice arrangement will be outside the scope of National Insurance contributions ( NICs). Amounts given up through salary sacrifice above £2,000 annually will attract both employer and employee NICs, meaning any excess over £2,000 will be treated for NICs in the same way as other employee workplace pension payments. Employer contributions remain unchanged, and income tax relief is not affected. Employers must report the total salary forgone via existing payroll systems, and HMRC has pledged to liaise with stakeholders. Further guidance will be issued ‘before April 2029’. The National Insurance Contributions ( Employer Pensions Contributions) Bill 2026 will add a new subsection to section 4 of the Social Security...
The provisions governing directors and employees for restricted securities set out in Chapter 2, Part 7 of the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003) are very commonly encountered in day-to-day practice on corporate transactions involving management. In broad terms, restricted securities are employment-related securities which: at the time of acquisition are subject to recognisable restrictions that depress the market value of the securities Such restrictions are typically intended to incentivise an employee to remain with the employing company and to meet certain performance conditions. Either the securities themselves can be restricted (i.e. restricted securities) or the restriction can apply to the employee’s interest in those securities (a restricted interest in securities). The restrictions may affect an employee’s ability to retain the shares (for example, the articles of association may require an employee to transfer shares at the...
The procedure for making joint restricted securities elections is the same regardless of whether the election is made under sections 425(3), 430 or 431 of the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003). For an election to take effect, it must satisfy all of the following: Be executed by both the employee (or director or other office-holder) and the employer. Note: it is the employer, not the company issuing or transferring the employment-related securities (if different), that must enter into the election with the employee. Use an approved form (see below). Be completed within 14 days of: the acquisition (for elections under ITEPA 2003, s 425(3) or s 431), or the chargeable event (for an election under ITEPA 2003, s 430). ...
The Model Code The Model Code, previously set out in former Listing Rules published by the Financial Conduct Authority ( FCA), was deleted by the FCA as a consequence of the coming into force of the Market Abuse Regulation ( EU) 596/2014 ( MAR) on 3 July 2016. Companies with a former premium listing of equity shares were required to comply with the Model Code, which restricted persons discharging managerial responsibilities ( PDMRs) dealing in such company’s securities. The......
Capital gains tax—basic principles When someone disposes of an asset and realises a profit that is capital in character, this may result in a taxable capital gain arising. In determining whether a tax charge arises, there are several points to take into account and carefully consider: the asset, the disposal, and the person making the disposal must each be of a kind that can be subject to capital gains tax ( CGT) in circumstances the consideration, after deducting allowable costs, must produce a positive figure that is a gain: for further information on computing the gain, see Practice Note: How is a capital gain calculated? an exemption or a relief might well apply: some assets, and some...
Background and current UK listing regime A major overhaul of the UK listing framework took effect on 29 July 2024, removing the premium and standard segments and introducing a single listing category for equity shares issued by commercial companies. This consolidates the regime, replacing dual segments with a unified route to listing. The commercial companies category is disclosure-led and sits alongside other listing categories, namely shell companies, secondary listing and closed‑ended investment funds. To implement the reforms, a new UK Listing Rules sourcebook came into force and the previous Listing Rules sourcebook was revoked. For details, see Practice Note: Reform of the UK listing regime—fundamentals. The updated regime made no substantive changes to the rules and guidance governing the adoption, approval, operation of and disclosure in respect of employee share incentive schemes, other than the removal of the premium and standard listing segments. However, all...
ARCHIVED : This Practice Note is archived and is no longer maintained. Following recommendations of the Office of Tax Simplification and an HMRC consultation, the territorial reach of the employment-related securities rules for internationally mobile staff (and associated corporation tax relief) altered with effect from 6 April 2015. From that date, the governing legislation is contained in Schedule 9, Part 1 to the Finance Act 2014 ( FA 2014). Those provisions cover chargeable events taking place on or after 6 April 2015 concerning employment-related securities obtained before (arguably with retrospective effect) and after that date (the commencement provisions are in FA 2014, Sch 9, Pt 4)......
Overview of the practical issues Shareholders looking to transfer the ownership of their company into an employee-ownership trust ( EOT) should assess a series of practical considerations at the point the EOT is set up and the transaction carried out, as well as after completion. Key practical considerations include: creating the EOT and appointing trustees securing finance for the trust operating the EOT, including the risk of disqualifying events ongoing EOT administration For an overview of what an EOT is, see Practice Note: Employee ownership trusts. For a sample EOT deed, refer to Precedent: Employee Ownership Trust Deed. For guidance on pitfalls and common mistakes when establishing or running an EOT, see Practice Note: Pitfalls of setting up and operating an employee-ownership trust. For further detail on matters to consider when EOT trustees sell a company already held by the EOT, see...
ARCHIVED: This Practice Note has been archived and is not maintained. This Practice Note sets out how to assess and adjust key contractual provisions so they are fit for use after 11 pm on 31 December 2020, the moment (known as IP completion day) when the implementation period for the UK’s departure from the EU concluded. It is primarily designed to support organisations updating their standard form contracts for post‑ IP completion day use, rather than revising live agreements, though it may assist with those too. While the underlying legal landscape has shifted considerably, most contracts are largely unaffected and English contract law itself remains unchanged. The Trade and Cooperation Agreement ( TCA) between the EU and the UK concerning their future relationship does not materially alter the consequences of the end of transition. For more detail, see: LNB News 24/12/2020 76 and LNB News...
This Practice Note outlines retained EU law as it operated in 2021–23, setting out key definitions and concepts with pointers to the relevant provisions of the European Union ( Withdrawal) Act 2018 ( EU( W) A 2018). It further considers the overhaul of retained EU law and its re-labelling as assimilated law from 2024. Wider aspects of the EU( W) A 2018, together with the distinct arrangements and divergences for the UK’s devolved administrations, fall outside the scope of this Practice Note. Evaluation of particular instruments, provisions or rights, and whether they are retained, is likewise excluded. what’s the difference? Both “retained EU law” and “assimilated law” describe the residual body of domestic law that originally stemmed from the UK’s membership of the EU. The labels mark two phases in the domestic legal system’s adjustment to...
This Practice Note sets out the key questions to consider when establishing a new share-based incentive arrangement. The answers to these discussions will shape the type of plan(s) ultimately chosen and the plan(s) terms. why is an incentive plan needed? which type of plan is most suitable? what will the plan’s terms be? what legal, regulatory, tax and financial factors could affect the plan? how will the plan be communicated and run? For more on the rollout process, see Practice Note: Share plan implementation process. For a questionnaire that helps a company identify the most appropriate share scheme for its aims and needs, see Precedent: Questionnaire to select the right share option scheme. See also Practice Note: Selecting the right share scheme. Note: This Practice Note is a high-level introduction to certain issues to assess when...
The tax treatment of payments in lieu of notice ( PILONs) Significant changes to sections 402–404 of the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003) took effect on 6 April 2018. In essence, every PILON—whether made under an express or implied contractual PILON clause or made without any such provision—is now fully taxable and liable to both employee and employer National Insurance contributions ( NICs). This position is delivered through a requirement for employers to perform a post-employment notice pay ( PENP) calculation. As set out below, that calculation enables employers to determine which portion of a termination payment falls within the tax charge. Consequently, the pre‑2018 distinction between PILONs paid under a contractual PILON clause (previously wholly taxable) and PILONs not paid under a contractual provision (which could access the £30,000 tax exemption and were entirely outside NICs) no longer...
Performance ratchets This Practice Note explores the tax implications for the UK management team in a private equity-backed management buyout ( MBO) that arise specifically from performance ratchets. Performance ratchets are a device employed by private equity firms investing in MBOs to motivate management and align their interests with those of the private equity backer. The success of an MBO is typically highly reliant on the management team. Managers can be incentivised, and their interests aligned, by subscribing for shares in the top company of the acquisition group ( Newco 1), giving them a stake in the proceeds of a future private equity exit (ie on top of any salary). Performance ratchets give management the chance to uplift the value of their equity holding further where defined performance targets are achieved. This Practice Note concentrates on the tax issues arising...
The aim of this note is to set out the principal areas in which parallel options are commonly useful, how they interact with other share incentive arrangements, HMRC’s acceptance of such plans and the practical considerations around implementation. The main application of parallel options is either to add tax efficiency to an unapproved share incentive arrangement or to address issues within existing arrangements such as underwater options. Practitioners should exercise particular care when putting in place parallel options that involve a tax-advantaged scheme such as an enterprise management incentives ( EMI) scheme or a company share option plan ( CSOP). The key points are highlighted below (together with HMRC’s published views). What are parallel options? Parallel options are employee share option arrangements that are linked to another employee share incentive scheme. They will typically be introduced either to enhance another share plan, eg deliver tax...
The large and public client off-payroll regime This regime generally applies where a public authority or a private sector organisation (other than one that is small or lacks a UK connection) engages a worker via an intermediary, such as a personal service company ( PSC), and where, ignoring that intermediary, the link between the individual and the end client would be one of employment. The large and public client off-payroll regime places the duty to decide if IR35 is applicable on the end client. If the regime applies, the obligation to withhold income tax and National Insurance contributions ( NICs) falls on the fee-payer, meaning the party nearest to the PSC in the contractual chain—this could be the end client where it contracts directly with the PSC, or another intermediary in more complex supply chains. This allocation of...
The income tax charges associated with employment-related securities and securities options Income tax liabilities tied to employment-related securities and securities options usually arise on the acquisition of securities, or because employment income is treated as arising on a later chargeable event, rather than through a cash receipt. Consequently, the employer often cannot withhold pay as you earn ( PAYE) in the ordinary manner. Specific provisions require an employer to operate PAYE in respect of these notional payments. Where that PAYE amount is not made good to the employer, an extra, punitive, income tax charge falls on the employee (or director), and Class 1 NICs for the employer and the employee also arise, to the extent of the unpaid PAYE amount......
In addition to cash pay, such as wages or salaries, many remuneration packages also contain non-cash elements, for example the provision of a car, health insurance or childcare. An employer may likewise settle particular costs on behalf of the employee, for instance a home landline, or utility bills. These non-cash earnings are commonly described as benefits-in-kind, or simply benefits. Non-cash earnings can be brought into charge to income tax on employment income under a range of provisions, including: the charge on earnings in section 62 of Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003)—if the benefit constitutes money's worth; specific provisions in ITEPA 2003, Part 7 relating to the provision of employment-related securities and securities options (see Practice Note: Employment-related securities—overview and the related Practice Notes); the disguised remuneration provisions in ITEPA 2003, Part 7A—which should be...
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When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...
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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