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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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Double tax treaties ( DTTs) Double tax treaties ( DTTs) are founded on the idea that members of a multinational group are charged tax as if they were independent, dealing with one another at arm’s length. To apply the separate entity concept correctly, DTTs allow jurisdictions to amend a group company’s profits so that any outcomes arising from particular conditions or relationships are removed for tax purposes. This is referred to as the ‘arm’s length principle’. Under Article 9 of the Organisation for Economic Co- Operation and Development ( OECD) model tax convention ( OECD MTC) and the UN model tax convention ( UN MTC), contracting states may recalibrate the taxable income of ‘associated enterprises’ when their transactions are not conducted on arm’s length terms. The 2025 revised commentary to Article 9 of the OECD MTC makes clear that, when adjusting an...
This Practice Note considers how the UK’s transfer pricing regime applies to chargeable periods (for ease in this Practice Note, called ‘accounting periods’) that start before 1 January 2026. Be aware that the Finance Act 2026 brought in a series of changes to the UK transfer pricing rules, largely commencing for accounting periods beginning on or after 1 January 2026, subject to certain transitional rules. For broader background on transfer pricing, see the Practice Notes: Transfer pricing—what is it? and Transfer pricing—key concepts and principles. Transfer pricing adjustments Where the UK transfer pricing rules are engaged in relation to a transaction between two parties, the profits or losses of the so‑called ‘potentially advantaged person’ must be computed for tax as though an arm’s length provision had applied between them, rather than the actual terms. The ‘potentially advantaged person’ is the party that secured a...
FORTHCOMING CHANGES: At Budget 2025 on 26 November 2025, the government stated it intends to introduce modest rectifying amendments to the residence-based tax regime established by Finance Act 2025......
In many cases, identified tax exposures can be mitigated or removed by arranging a tax insurance policy. Mirroring the deployment of warranty and indemnity ( W& I) cover in mergers and acquisitions ( M& A) transactions (see Practice Note: Warranty and indemnity insurance in M& A transactions), tax insurance has emerged as a widely adopted tool for tackling contingent tax liabilities. Once primarily applied to discrete tax concerns uncovered during the deal process, a maturing market has seen tax insurance utilised across a growing range of non-transactional scenarios. For guidance on the practical matters a tax lawyer should weigh when advising on an M& A share sale where a party intends to obtain either W& I insurance or tax risk insurance, see Practice Note: Insured M& A transactions—a tax lawyer's guide. This approach addresses contingent tax risks within deals and beyond,...
Certain sums paid when an employment or office ends can be received free of tax. In practice, many of these reliefs are easily overlooked. A termination payment may escape tax because it fits within the £30,000 exemption, because the whole amount is specifically relieved by statute, or because it is not regarded as employment income at all. These reliefs apply only to payments that would otherwise be taxable as termination payments within section 401 of the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003). They do not extend to amounts chargeable under other provisions as earnings, benefits, payments for restrictive covenants, or sums from an employer financed retirement benefits scheme, as those other charging rules ( ITEPA 2003, ss 62, 63–214, 225 and 394) take precedence—see Practice Note: Termination payments and tax. Those statutory charging rules in ITEPA 2003, ss 62,...
Lexis+® UK Tax thanks Nigel Doran of Macfarlanes LLP for his observations on a previous draft of this Practice Note. Nevertheless, the opinions set out are those of Lexis+® UK Tax. The Practice Note was later reviewed and revised by Aparna Nathan, KC, Devereux Chambers. Background on the Ramsay principle appears in Practice Note: Ramsay as a guide to statutory construction. Judicial decisions have honed the Ramsay principle over time, and in Arrowtown Assets Ribeiro PJ was able to encapsulate it in a single line: ‘the ultimate question is whether the relevant statutory provisions, construed purposively, were intended to apply to the transaction, viewed realistically.’ That distillation has been endorsed in numerous subsequent authorities (including BMBF). Notably, the formulation omits any mention of tax avoidance, even though that is the setting in which the Ramsay principle evolved. Earlier...
The Employment ( Allocation of Tips) Act 2023 ( E( AT) A 2023) The Employment ( Allocation of Tips) Act 2023 ( E( AT) A 2023) imposes a statutory duty on employers in all industries to pass on to workers, without deductions, every tip, gratuity and service charge they receive or over which they hold control or material influence (qualifying tips), and to ensure distribution is fair and transparent. While it leaves untouched the rules on the taxation of tips, gratuities and service charges, its purpose is to guarantee that customer payments of this kind are allocated to workers. The Act is reinforced by a statutory Code of Practice on Fair and Transparent Distribution of Tips, together with non-statutory guidance. For further detail on the legal framework governing the payment and allocation of tips, gratuities and service charges, see Practice Note:...
What is exchange of information? Exchange of information ( EOI) among tax authorities has long stood as a key pillar of international co-operation in tax matters. In more recent years, growing levels of public and governmental concern about perceived tax avoidance—at both the individual and the corporate level—have elevated the subject still further, ensuring that EOI has become a centrally important (and arguably more effective) cross-border anti-avoidance measure. There are numerous regimes and instruments pursuant to which authorities such as HMRC exchange information relating to taxpayers with overseas tax authorities, in accordance with those frameworks. The primary focus of this Practice Note is the approach to EOI taken under double tax treaties or conventions ( DTTs), although the other principal platforms through which EOI operates are also summarised. In most cases, DTTs contain a specific provision dealing with the exchange of...
This Practice Note offers a succinct overview of TIEAs. For a broader introduction to tax information exchange across jurisdictions, see Practice Note: Exchange of information on tax matters. For guidance on the OECD's Multilateral Convention on Mutual Administrative Assistance in Tax Matters (the Multilateral Convention), see Practice Note: The OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters ( MAATM). For an introduction to the automatic exchange of information, including the Foreign Account Tax Compliance Act (known as FATCA) and the Common Reporting Standard (the CRS), see Offshore tax evasion—overview and Practice Note: Automatic exchange of information—outline. What is a TIEA? A TIEA is a bilateral arrangement through which jurisdictions agree to co-operate on tax matters by sharing information. Most TIEAs are modelled on the OECD's Model Agreement on Exchange of Information on Tax Matters, published in 2002. Under the Model...
Updated in October 2025 Introduction Since the mid-twentieth century, Taiwan has stood among the ‘ Asian Tigers’, sustaining a vibrant capitalist economy with a strong global footprint. The World Trade Statistical Review 2025 records Taiwan as the 16th largest exporter in world merchandise trade for 2024, while the IMD World Competitiveness Yearbook 2025 ranks it 6th worldwide. The government also provides a range of attractive incentives that enhance Taiwan’s business-friendly appeal. Supported by political stability and a dependable domestic market, deep expertise in both hardware and software engineering, a rich pool of high-calibre talent, mature infrastructure, and favourable investment legislation, Taiwan offers a compelling setting for enterprise. Positioned at the heart of the Asia Pacific, it serves as a strategic bridge to major economies including the US, China, Japan and Korea, along with emerging markets such as the ASEAN Economic Community ( AEC). In June 2010, the...
The syndicated loan scheme ( SLS) The SLS permits the syndicate manager to lodge a single application for all lending members collectively who are resident in jurisdictions that have a double tax treaty ( DTT) with the UK, in order to obtain relief from the requirement to deduct (and account to HMRC for) an amount in respect of UK income tax on UK source interest paid to them, provided the applicable relevant DTTs allow such relief. In this Practice Note, the duty to deduct (and account to HMRC for) an amount in respect of UK income tax from UK source yearly interest payments is described as a withholding tax, even though it is, in substance, a means of actually collecting UK income tax from the UK-based payer rather than from the...
Shari’a-compliant financing arrangements Shari’a‑compliant financing arrangements, otherwise described as Islamic financing arrangements, can be structured in a number of ways. To cater for the direct tax analysis of Shari’a financing variants, the UK has put in place specific provisions known as the alternative finance arrangement rules. The purpose of these UK rules is to ensure that, for direct tax purposes, a qualifying Shari’a‑compliant financing is taxed in the same manner as an equivalent conventional financing arrangement. Achieving that parity depends upon the arrangements meeting the relevant statutory conditions prescribed for alternative finance arrangements in the applicable legislation. Currently, the regime extends to five distinct categories of financing arrangement. Importantly, the direct tax framework for alternative finance is not limited solely to Islamic financing; non‑ Shari’a structures can, in principle, be brought within its scope as well. Among the five categories is the...
Sukuk Sukuk (singular: ‘sakk’) are a form of Shari’a‑compliant financing, commonly referred to as Islamic bonds or certificates. For further detail, see Practice Note: Sukuk—investment bond arrangements and their UK direct tax treatment— What are sukuk? Where the relevant conditions are met, sukuk can qualify for the UK tax treatment that applies to alternative finance investment bond ( AFIB) arrangements. For the specific rules, see Practice Note: Sukuk—investment bond arrangements and their UK direct tax treatment... Sukuk al ijara Sukuk al ijara is a particular variant of sukuk. In a sukuk al ijara, the asset that the bond‑issuer (the term used in legislation for the sukuk issuer) holds on trust for the sukuk investors (the certificate holders) is typically land. The issuer acquires an interest in that land via a sale and leaseback—the sale and leaseback constitutes the ijara. For more...
Sukuk Singular: ‘sakk’ denotes Shari’a-compliant financing instruments, commonly known as Islamic bonds or certificates. For additional detail, see Practice Notes: The structure and elements of a Sukuk transaction and Sukuk—investment bond arrangements and their UK direct tax treatment— What are sukuk? Where the statutory criteria are satisfied, sukuk can access the UK tax regime that applies to alternative finance investment bond ( AFIB) arrangements under those provisions. For guidance on those rules, see Practice Note: Sukuk—investment bond arrangements and their UK direct tax treatment. Sukuk al ijara represents a specific category of sukuk. In a sukuk al ijara, the asset that the bond-issuer (the legislative term for the sukuk issuer) holds on trust for the sukuk investors (the certificate holders) is frequently land. The issuer obtains an interest in that land via a sale and leaseback; this sale and leaseback...
Business reorganisations can at times see a company move an ongoing trade into another company under the same ownership. Where specified criteria are satisfied, the provisions in Chapter 1, Part 22 of the Corporation Tax Act 2010 mean the recipient (successor) company effectively replaces the transferor (predecessor) company in relation to trading losses and capital allowances. These provisions are commonly referred to as the rules on successions to a trade, or simply the succession rules. When the relevant tests are fulfilled the succession rules take effect automatically. No claim is required and it is not possible to opt out of the succession rules. This Practice Note considers the tax consequences of shifting a trade without changing its ultimate ownership (for example, a transfer within a group), covering the conditions that must be in place for the succession rules to operate, and their impact on...
This Practice Note sets out the criteria a statutory (i.e. dividend) demerger, whether direct or indirect, must satisfy to qualify as an exempt distribution, thereby avoiding an income tax (or corporation tax on income) charge for shareholders. For background on why a company might implement a demerger, and an overview of alternative demerger structures, see Practice Note: Demergers—an introduction to the tax issues. For information on: what a statutory demerger is the difference between the direct and indirect routes the circumstances in which a company might choose to carry out a statutory demerger the steps involved the tax implications, and why it is important for a statutory demerger to qualify as an exempt distribution see Practice Note: Statutory demergers. Direct demergers The following conditions must be satisfied for the transfer of shares under a direct statutory demerger to be treated as an exempt...
This Practice Note reviews the different stamp duty land tax ( SDLT) rates, including those that apply to transactions involving rent. For general guidance on when SDLT is chargeable, see Practice Note: Land transactions, chargeable interests and chargeable transactions. From 1 April 2015, SDLT no longer applies to any land transaction concerning interests in or over land in Scotland. From that date, such transactions are within land and buildings transaction tax ( LBTT), subject to transitional provisions. Accordingly, any references in this Practice Note to ' UK land' or similar wording, in the context of SDLT, should be understood as excluding interests in or over land in Scotland from 1 April 2015. For further information, see the LBTT subtopic. SDLT also ceased to apply to any land transaction involving any interest in or over land in Wales from 1 April 2018. From that date, land...
Types of special purpose vehicle and orphan trust The deployment of special purpose vehicle structures is widespread in aviation finance. They offer lenders several advantages, including tax benefits and a bankruptcy-remote platform for the financing. A special purpose vehicle ( SPV), also known as a single purpose company ( SPC), is a legal entity established for a limited aim; in aviation finance this is commonly to own an aircraft for a particular transaction. There are numerous forms of SPV used in aviation finance, with the principal categories being: subsidiary companies orphan trusts limited partnerships Each of these is considered below. The type of SPV selected will vary on a transaction-by-transaction basis. Subsidiary companies Subsidiary companies are typically limited liability companies incorporated in a tax-friendly jurisdiction......
Updated in March 2026 Introduction The Republic of Korea ( South Korea, and called ‘ Korea’ throughout this Practice Note) offers conducive conditions for accessing the East Asia marketplace, helped by its centrally placed position within the region’s transport corridors. Korea presently holds free trade agreements with 59 partners in total, including the US, the EU, China, ASEAN, India, and Chile, and is positioning itself as a global commercial hub, not only an East Asian one. Korea actively promotes inbound foreign investment via a suite of laws that grant overseas investors various incentives, such as tax reliefs. Businesses can choose from multiple structures when establishing operations in Korea. Alternative entry routes and models are likewise available for tailoring a presence to specific needs in Korea. This guide seeks to spotlight several pivotal considerations a new enterprise must address before commencing activity in Korea. It is not...
Revised in December 2025 Introduction As one of the continent’s biggest economies, South Africa offers a strong springboard for investment and commerce across Africa, especially in sub- Saharan markets. The country benefits from mature infrastructure and long-standing trading links with its neighbours. Businesses can adopt multiple structures when establishing operations in South Africa. This Practice Note outlines principal considerations for new entrants before commencing activities in the country. It is not a comprehensive manual, and tailored South African legal advice should always be obtained when forming and running a business locally. South Africa has three spheres of government: National Provincial Local The National Assembly is the highest law-making authority, and its statutes apply nationwide. There are nine provinces, each with a legislature, a premier and an executive council. Although certain areas fall within the exclusive legislative remit of the National Assembly, provincial legislatures may craft their own laws and...
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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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