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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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ARCHIVED: This archived Practice Note summarises the arrangements made between the UK and its Crown Dependencies and Overseas Territories to exchange information on financial accounts—known as the Crown Dependency/ Overseas Territory ( CDOT) agreements—and the reporting required under those arrangements for periods up to the end of 2016, before CDOT was superseded by the Common Reporting Standard ( CRS). For details on CRS, see Practice Note: Automatic exchange of information—the Common Reporting Standard: a summary. What are the CDOT agreements? The UK entered into agreements with its three Crown Dependencies and a number of Overseas Territories to provide details of financial accounts held in those jurisdictions by UK tax residents (or passive investment companies controlled by such individuals): Crown Dependencies: Guernsey, Jersey, the Isle of Man Overseas Territories: Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Gibraltar, Montserrat, Turks & Caicos...
ARCHIVED: This archived Practice Note summarises the former withholding tax exemption that applied to UK source yearly interest payments or royalty payments made before 1 June 2021 (or, in some instances, before 3 March 2021) to associated EU company recipients. The exemption was repealed by section 34 of the Finance Act 2021, taking effect for payments made on or after 1 June 2021 or, in particular cases, on or after 3 March 2021. This Practice Note is no longer maintained and is provided for background reference only. For other UK withholding tax exemptions, see Practice Note: Exemptions and reliefs from UK withholding tax on yearly interest. This Practice Note is relevant solely to UK source payments of interest and/or royalties made before 1 June 2021 or, in certain circumstances, before 3 March 2021. For further details, see: Brexit and repeal of UK legislation that gave effect to the...
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...
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...
The residual liability provisions Acting as the safety net within the benefits code, the residual liability provisions supply a way to assess the value of a benefit given to an employee where neither the money’s worth principle nor any particular computational rule applies. The benefits code is set out in Part 3, Chapters 2–11 of the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003), with the residual liability provisions themselves found in Chapter 10. For an outline of the charge to income tax on benefits arising from employment in general, see Practice Note: How employment income is taxed—non-cash earnings or benefits. The scope of benefits taxable under the residual liability provisions is very broad, covering 'a benefit or facility of any kind' provided it constitutes an employment-related benefit in practice......
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...
This Practice Note aims to outline the key advantages and disadvantages of the following commonly used employee share incentive arrangements: enterprise management incentives ( EMI) schemes company share option plans ( CSOPs) share incentive plans ( SIPs) save as you earn/sharesave ( SAYE) schemes unapproved share option schemes long term incentive plans ( LTIPs) growth/value share arrangements joint share ownership plans ( JSOPs) phantom share plans EMI schemes For broader information on EMI schemes, refer to Practice Note: How EMI schemes work and key features. Advantages of EMI schemes Among tax-advantaged share plans, EMI schemes offer the greatest scope to tailor the scheme’s terms and conditions HMRC may provide advance assurance confirming a company’s eligibility to grant EMI options......
FORTHCOMING CHANGES to EIS and VCT financial limits and call for evidence on tax support for entrepreneurs: At Budget 2025, the government set out a cut to the upfront income tax relief for individuals investing in VCTs, reducing it from 30% to 20%. The upfront relief for EIS investments will stay at 30%. It also outlined three changes spanning both EIS and VCT: Annual company fundraising limits will rise from £5m to £10m, and from £10m to £20m for knowledge‑intensive companies ( KICs). The lifetime company risk finance investment cap will increase from £12m to £24m, and from £20m to £40m for KICs. The gross assets cap an investee must not exceed will move from £15m to £30m before share issuance, and from £16m to £35m afterwards. These measures are to be legislated in the Finance Bill 2026 and will take effect from 6 April...
FORTHCOMING CHANGES to EIS and VCT financial limits and call for evidence on tax support for entrepreneurs: In Budget 2025, the government confirmed that the initial income tax relief for individuals investing in a VCT will drop from 30% to 20%. The upfront income tax relief for EIS remains at 30%. It also set out three updates affecting both EIS and VCT: a rise in the annual funding caps companies may secure under EIS and VCT from £5m to £10m, and from £10m to £20m for knowledge-intensive companies ( KICs) a doubling of the lifetime company risk finance limit from £12m to £24m, and from £20m to £40m for KICs a higher gross assets threshold that an investee company must not exceed: from £15m to £30m before shares are issued, and from £16m to £35m after that...
The double taxation treaty passport ( DTTP) scheme The DTTP offers an alternative to the standard certified route for securing full or partial relief under a relevant double tax treaty ( DTT) from UK taxation on UK source yearly interest paid to an overseas lender that is entitled to such relief. If the application is approved, the borrower paying UK source yearly interest is freed—entirely or to the extent provided by the applicable DTT between the UK and the lender’s jurisdiction of residence—from the requirement to withhold, and to account to HMRC for, UK income tax that would otherwise arise on that interest paid to the non‑ UK resident lender. This Practice Note describes how to claim DTT relief via the DTTP scheme and sets out the next steps once the DTTP has been successfully applied to a loan. For more information on: what qualifies as...
FORTHCOMING CHANGES : At Budget 2025, the government stated it will legislate through Finance Bill 2026 (the Finance ( No 2) Bill 2024–26) to bring in measures aimed at promoters or enablers of marketed tax avoidance. These sit in Part 6 of the Bill, as introduced on 4 December 2025, and include: amendments to the DOTAS and DASVOIT civil penalty regime, enabling HMRC to issue DOTAS penalties directly rather than seeking tribunal approval a general ban on promoting marketed arrangements with no realistic prospect of success, and a ban on promoting arrangements named in universal stop regulations ( USRs). Breach of either ban could lead to publication, financial penalties, and criminal prosecution promoter action notices ( PANs). A PAN would require businesses to stop supplying goods or services to promoters of tax avoidance where those goods or services are used to promote avoidance and the promoter is in...
ARCHIVED : This archived Practice Note summarises the Diverted Profits Tax ( DPT) regime, which was repealed for accounting periods beginning on or after 1 January 2026. DPT applied to periods starting between 1 April 2015 and 31 December 2025. It has been replaced by the unassessed transfer pricing profits ( UTPP) rules set out in Schedule 5 to the Finance Act 2026. This Practice Note is not maintained and is provided for background only. The DPT provisions are found in Part 3 and Schedule 16 to the Finance Act 2015. The legislation introduced a tax designed to deter avoidance of UK tax by multinational groups operating in the UK. DPT features distinct rules on notification, assessment and payment, and, unlike corporation tax, it is not self-assessed. This Practice Note considers compliance and administration issues arising from the regime, including: company...
What is disguised remuneration? For many years, HMRC has worked to ensure that rewards arising from employment are correctly brought within income tax and National Insurance contributions ( NICs), deducted by employers through the pay as you earn ( PAYE) regime. To support this objective, the Finance Act 2011 introduced the disguised remuneration rules, designed to address the use of Employer Financed Retirement Benefit Schemes ( EFRBS), Employee Benefits Trusts and other forms of ‘disguised remuneration’, so that receiving benefits is no more advantageous than taking a wage. The legislation places a PAYE duty on the employer and/or trustees of pension arrangements to collect income tax and the related National Insurance Contribution ( NIC) charges. It also serves as a clear warning to employers and the promoters of tax avoidance schemes that contrived pay structures intended to avoid, defer or lessen income tax...
FORTHCOMING CHANGE As trailed in the Autumn Budget 2024, the government set up an independent review of the loan charge. Formally launched on 23 January 2025, the review’s remit was to examine the obstacles preventing those subject to the loan charge, who have not already settled and paid their tax liabilities in full, from reaching a resolution with HMRC, and to propose ways in which they could be encouraged to settle with HMRC (see News Analysis: Autumn Budget 2024— Independent review of the loan charge). To aid the review, an official call for evidence, directed at individuals who remain within the loan charge (and their advisers), was also subsequently published on 28 March 2025. The Final Report of the review, alongside the government’s response, was formally issued at Budget 2025 on 26 November 2025......
STOP PRESS: Abolition of non-dom regime and remittance basis of taxation from 2025–26 From 6 April 2025, the Finance Act 2025 abolishes the remittance basis of taxation and replaces it with a residence-based regime. The package introduces a new Foreign Income and Gains ( FIG) regime and updates the rules on overseas workday relief. For more on these changes, see Practice Note: The abolition of the remittance basis of taxation from 2025–26. FORTHCOMING CHANGE: As flagged at Autumn Budget 2024, the government commissioned an independent review of the loan charge. Announced on 23 January 2025, the review was to examine barriers preventing those subject to the loan charge, who have not already settled and paid their tax liabilities in full, from achieving resolution with HMRC, and to recommend how they might be encouraged to settle with HMRC (see News Analysis: Autumn Budget 2024—...
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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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