Legal Practice Notes

This Practice Note outlines the principal distinctions between standard bonds and sukuk, or trust certificates as they are otherwise known, (the Sukuk). It also provides an overview of the principal Sukuk structures and offers commentary on recent trends observed across the Sukuk market. This Practice Note should be read alongside Practice Note: Sukuk documentation and transaction mechanics. What are Sukuk? Sukuk are Shari’ah-compliant certificates, defined by the Accounting and Auditing Organisation for Islamic Financial Institutions ( AAOIFI) as evidencing undivided interests in ownership of tangible assets, usufruct and services, or in the assets of specified projects or particular investment activities. The word ‘ Sukuk’ is Arabic and broadly translates as ‘instruments’ or ‘certificates’. Sukuk are frequently described as Islamic bonds and, in general terms, operate as the fixed-income counterpart of a conventional bond or note instrument. Sukuk follow...

Across legal practice, solicitors are represented on tax law matters by the Tax Law Committee. Below is a curated selection of its representations and practice notes. For more about the Committee, including its members, see: Details of the Law Society’s Tax Committee. Representations The Committee shapes policy in response to proposed changes in the law arising from bodies such as HMT, HMRC, the OECD and the European Commission. Tax treatment of asset holding companies in alternative fund structures consultation – Law Society response HMRC consultation on implementation of disclosable arrangements – Law Society response We responded to an HMRC consultation on draft regulations implementing EU Directive 2018/822 ( DAC 6) in the UK Major step closer to DAC 6 reporting deadlines extension EU Commission proposes DAC 6 deferral Changes to capital gains tax for UK residential property Budget response: No end to austerity in the justice...

FORTHCOMING CHANGES relating to Making Tax Digital ( MTD) for Income Tax and penalty reform: late payment and late submission penalties : As set out at Spring Budget 2021, the Finance Act 2021 introduces major revisions to the frameworks governing late-payment and late-submission penalties for VAT and income tax. For VAT, these reforms—together with changes that bring late-payment interest provisions for VAT into line with those for income tax—came into force on 1 January 2023 (see Practice Note: VAT penalties)......

What is landfill tax? Landfill tax is an environmental levy managed in England and Northern Ireland by the Commissioner of Customs and Excise, through HMRC Central Unit ( Landfill Tax). For an overview of landfill tax in Wales and Scotland, see the Practice Notes on Landfill disposals tax ( Wales) and Scottish landfill tax. Who pays landfill tax? Ordinarily, the ‘operator’ of the landfill site is responsible for paying landfill tax. The operator is the permit holder for a landfill site, or the person who ought to have a permit for sites where material is disposed of. If the permit holder has no direct involvement in operating the site itself, the liability to pay the tax also extends to the ‘controller’ of the site. The controller is the person who decides what material is permitted to be disposed of at the particular landfill site. A...

What is landfill disposals tax? Landfill disposals tax is an environmental levy overseen by the Welsh Revenue Authority. From 1 April 2018, sending waste to landfill in Wales ceased to fall under UK landfill tax and instead became liable to landfill disposals tax. In June 2017, the Welsh Parliament ( Senedd) approved the Landfill Disposals Tax ( Wales) Bill. This measure replaces UK landfill tax in Wales with effect from 1 April 2018. The Bill followed a consultation, with Welsh Ministers exercising powers granted by the Wales Act 2014. It received Royal Assent on 7 September 2017, creating the Landfill Disposals Tax ( Wales) Act 2017 ( LDT( W) A 2017). The Landfill Disposals Tax ( Wales) Act 2017 ( Commencement No 1) Order 2017, SI 2017/955, was made on 28 September 2017. These arrangements apply across Wales......

are capital allowances available to traders. Capital allowances are chiefly available to individuals and other unincorporated entities for new acquisitions. They are not, however, available to anyone carrying on a trade that uses the cash basis. For companies, capital allowances arise only on qualifying capital expenditure on know-how where the acquirer falls outside the corporate intangible assets regime in Part 8 of the Corporation Tax Act 2009 ( CTA 2009) in relation to that know-how. This applies where the know-how does not meet the asset or time conditions required to be within CTA 2009, Pt 8. For more detail, see Practice Notes: What is an intangible fixed asset? and What is a pre- FA 2002 asset? ‘ Know-how’ is specifically defined as industrial information or techniques likely to aid: manufacturing or processing goods or...

Contract Where an agreement is entered into by two or more parties, it may include a promise or obligation undertaken by two or more of them. Any such promise may be: joint several joint and several Whether an undertaking in contract is joint, several, or joint and several is a matter of construction, depending on the parties’ intention as revealed by the terms of the contract. For example, in Rhinegold Publishing v Apex Business Development, statutory demands were issued against Rhinegold Ltd and a related company, Tannhauser Ltd, for approximately £22,000 and £31,000 respectively. A settlement agreement followed under which the parties agreed to pay the sums due, but Tannhauser did not fully comply. Although the agreement was silent on liability, the High Court decided that, on a proper reading, the parties were jointly and severally liable. As a result, Rhinegold had to meet the...

Jointly owned awards Jointly owned awards are exactly what the name suggests: shares held jointly by an employee or director and a separate party, being either an investor in the company or, more commonly, the trustees of an employee benefit trust ( EBT). The jointly owned share model was developed as an alternative to other share incentive arrangements, including share options, restricted shares, or performance share plans, often delivered through nil-cost options. For more general background on joint share ownership plans ( JSOPs), see Practice Note: Introduction to joint share ownership plans. This Practice Note is intended to compare JSOPs with other unapproved share scheme structures in this context. Undertaking an exhaustive analysis is challenging, as there exists a multitude of structures, approaches—both distinct and overlapping—and variations on a common theme across the market in practice. Accordingly, the comparison drawn here, so far as...

Summary of the tax treatment of the acquisition of an interest in a jointly owned share Putting to one side the specific statutory provisions for employment-related securities outlined below, providing an individual with an interest in jointly owned shares as part of their overall package would be taxed as ordinary pay. Nevertheless, the employee acquires an “interest in an employment-related security”. Moreover, the eventual tax position is influenced by the targeted provisions in the Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003) concerning restricted securities. Typically, to avert later income tax and National Insurance contributions ( NICs) becoming payable when such restrictions are lifted or amended, the parties enter into a joint election under ITEPA 2003, s 431. This Practice Note explores each of these tax considerations in greater depth below. For more general guidance on joint share ownership plans ( JSOPs) and...

What are JSOP awards? Jointly owned shares are exactly what the term suggests: shares held together by an employee or director and another party — either a company investor or, more typically, the trustees of an employee benefit trust ( EBT). Joint share ownership arose as a substitute for other share incentive arrangements, for example share options, restricted shares or performance share plans (frequently delivered via nil cost options). Under a joint share ownership plan ( JSOP), the value received equals the uplift in the share price after grant (usually plus a ‘carrying cost’). Consequently, a JSOP operates like a market value share option, albeit with a distinct tax outcome. In essence, the plan focuses value on growth arising after grant, rather than existing value at the time of award for participants today. Commercial rationale The JSOP model offers a number of commercial strengths when set...

For broad information on Jersey, consult: Spitz & Clarke Offshore Service: Jersey: Commentary: General information. For details on Jersey cases, legislation and other legal topics, refer to: Jersey Legal Information Board. Legal framework The framework governing Jersey law trusts is primarily contained in the Trusts ( Jersey) Law 1984 (as amended) ( Law), supported by a significant corpus of judicial decisions. While rulings from England and other common law jurisdictions can carry strong persuasive value in Jersey, the Jersey courts have frequently taken an international lead through their trust law judgments, which have, in turn, become highly influential in other jurisdictions......

Updated in June 2025 Introduction With the world’s third-largest nominal GDP, Japan is a preferred springboard for international firms establishing a first foothold in Asia and for locating research and development centres, given the region’s rising significance and the advanced technologies of Japanese companies. It serves as a key regional hub, a gateway to neighbouring Asian markets, and a setter of trends. International companies, especially manufacturers, gain from Japan’s suppliers, from large corporates to small and medium-sized companies, renowned for high-quality products and components. The country offers a mature legal framework with reliable, impartial courts, alongside a stable democratic environment. It is widely recognised as among the safest nations, and boasts sophisticated infrastructure and high-quality medical services. Businesses can adopt multiple structures when setting up in Japan. This guide outlines key considerations for newcomers before commencing operations in Japan. This guide should not be treated as an......

This Practice Note deals with the specific rules applying to employment-related securities acquired for less than market value contained within Chapter 3C, Part 7 of Income Tax ( Earnings and Pensions) Act 2003 ( ITEPA 2003) For the definition of employment-related securities, see Practice Note: What is an employment-related security? Where the provisions apply, an employee or director who obtains shares or other securities: is regarded as having an interest-free, notional loan (see: below), and is charged to income tax each year on the benefit of that loan as though it were a real employment-related loan (see: below). Further income tax (and potentially National Insurance contribution ( NIC)) liabilities may arise when the notional loan is treated as discharged, for example on a disposal of the securities (see: below). In this Practice Note, these rules are called the ‘notional loan’...

Updated in April 2026 Introduction Italy is a parliamentary republic with a two‑chamber system. The Prime Minister serves as Head of Government. Parliament comprises the Chamber of Deputies and the Senate. The President of the Republic designates the Prime Minister, who must obtain Parliament’s confidence. The President’s term spans seven years. Parliamentary general elections are held every five years. Italy follows a civil law tradition. Its legal sources comprise the Constitution, statutes, secondary legislation, EU regulations (directly applicable and not requiring implementation) and EU directives (which must be enacted through national legislation). The nation is organised into 20 regions. The Constitution grants regions legislative powers in specific fields, including public health, education, agriculture and tourism. Italy is a founding member of the EU. Business environment Italy ranks among the world’s largest economies, typically within the top ten by GDP, and is Europe’s...

Updated in October 2024 Introduction Ireland is regularly placed among the world’s leading destinations for setting up international operations. The country has drawn many of the globe’s largest enterprises to base activities here, spanning global technology, pharmaceuticals, biosciences, manufacturing and financial industries. Ireland’s pull as a business hub stems from the pro-investment stance of successive Irish governments, EU membership, a highly favourable rate of corporation tax, and a talented, adaptable labour force. Together, these and other elements make Ireland a compelling choice for foreign direct investment. Following the UK’s departure from the EU on 1 January 2020, and the end of the transition phase on 31 December 2020 that had kept the UK within the customs union and single market, Ireland’s role as an English-speaking gateway to one of the planet’s largest markets has grown in importance. Several organisations have already...

IR35 anti-avoidance legislation IR35—named after the HMRC press release reference announcing the rules in Budget 1999—also called the ‘intermediaries legislation’ and, more recently, the ‘off-payroll working’ regime, applies when an individual supplies services to an end client via an intermediary, such as a personal service company ( PSC) or a partnership, in cases where the individual would otherwise be: for income tax purposes, treated as an employee or an office-holder of the client; and for National Insurance contributions ( NICs) purposes, treated as employed in employed earner’s employment by the client The purpose of IR35 has always been to ensure the worker’s income tax and NICs position broadly mirrors that of an employee. It does so by placing a PAYE and NICs obligation on an entity within the supply chain. Although the history of IR35 is set out fully below, to properly...

Small client off‑payroll regime As outlined in Practice Note: IR35—introduction, developments and key difficulties, the IR35 framework consists of two principal elements. As detailed in Practice Note: IR35—the small client off‑payroll regime, the part of IR35 described as the ‘small client off‑payroll regime’ applies in practice where an individual supplies services to an end client through an intermediary, for example a personal service company ( PSC) or a partnership, as appropriate to the engagement, in circumstances where the individual would otherwise be: for income tax, treated as an employee or office‑holder of the end client, and for National Insurance contributions ( NICs), treated as employed in employed earner’s employment by the end client For the avoidance of doubt, this does not apply where the end client is a public authority or a medium or large private entity with a UK connection (for which, see Practice Note:...

Large and public client off-payroll regime The large and public client off-payroll regime generally applies where a public body or a private sector organisation (excluding one that is 'small' or lacks a ' UK connection') hires a worker through an intermediary, such as a personal service company ( PSC), and, absent the presence of that intermediary, the engagement between the worker and the end client would amount to employment. The large and public client off-payroll regime puts the onus of determining whether IR35 applies, in effect, on the end client and, if the large and public client off-payroll regime does apply to the engagement, the duty to deduct income tax and National Insurance contributions ( NICs) rests, under the rules, with the fee-payer (i.e. the party closest, in the relevant contractual chain, to the PSC—this might be the end client where it...

Practice Note: IR35—introduction, developments and key difficulties As outlined in Practice Note: IR35—introduction, developments and key difficulties, IR35 consists of two principal components in total, as further described. This Practice Note sets out and addresses the strand of the IR35 rules that applies when an individual worker supplies services to an end client via an intermediary—such as a personal service company ( PSC) or a partnership—in circumstances where the individual would otherwise: for income tax purposes, be treated as an employee or office-holder of the end client, and for National Insurance contributions ( NICs) purposes, be regarded as employed in employed earner’s employment by the end client except where the end client is, instead, a public authority or a medium or large private entity with a UK connection. Across this Practice Note, together with all other items within this subtopic, this is...

The international movement of capital rules The international movement of capital rules should be taken into account when both of the following apply: a non- UK tax resident subsidiary (a foreign subsidiary or foreign company) is controlled, directly or indirectly, by a UK tax resident company; and either: the foreign company’s shares or debentures are issued or transferred; or the foreign subsidiary becomes, or ceases to be, a controlling partner in a partnership (wherever that partnership is established) In these circumstances, the reporting body—typically the top UK tax resident company in a group which, alone or together with others, controls the foreign subsidiary—must submit a report to HMRC unless the event or transaction is excluded, or is valued at no more than £100m, taking into...