Legal Practice Notes

ARCHIVED: This Practice Note is archived and not being maintained at present or updated further. STOP PRESS: The UK’s prospectus framework, formerly grounded in the EU Prospectus Regulation, has been superseded by the Public Offers and Admission to Trading Regulations 2024 (the POATRs), with granular admission-to-trading requirements now set out in the Financial Conduct Authority ( FCA) admission rules. The FCA issued its final rules on 15 July 2025. Those final rules took legal effect on 19 January 2026. In October 2025, the FCA released Primary Market Bulletin 58 which, among other matters, provided guidance on both the timing and approval of prospectuses (and supplementary prospectuses) and confirmed the removal of Listing Particulars as an admission document under the new framework. For more on the principal features of the new POATRs framework relevant to the debt capital markets, see Practice Note: The UK...

ARCHIVED: This Practice Note is archived and no longer maintained. STOP PRESS: The UK’s prospectus regime, previously derived from the EU Prospectus Regulation, has been superseded by the Public Offers and Admission to Trading Regulations 2024 ( POATRs), with all detailed admission to trading requirements now contained in the Financial Conduct Authority ( FCA) admission rules. The FCA published its final rules on 15 July 2025, which took effect on 19 January 2026. In October 2025, the FCA issued Primary Market Bulletin 58 which, among other matters, offered guidance on the timetable and approval of prospectuses (and supplementary prospectuses) and confirmed the removal of Listing Particulars as an admission document under the new framework. For more on the key aspects of the POATRs relevant to debt capital markets, see Practice Note: The UK Prospectus...

Practice Note The tax outcome for the owner hinges on whether a property is bought, retained or sold as an investment or as part of a trading (ie dealing) venture. Land, more than many other asset classes, can be kept as an investment or treated as trading stock, and the correct classification turns on each party’s particular position—the identical deal may amount to investment for one participant and trading for someone else. This Practice Note sets out the main factors used to differentiate trading from investment activity in relation to property. Those factors apply equally to transactions yielding gains and those producing losses. It also explains HMRC’s stance when opening enquiries into whether a property deal is trading or an investment in nature. It further addresses particular situations, such as mixed-motive transactions, taxpayers both dealing and investing, and tenants transacting in superior...

From April 2019, the profit fragmentation rules are designed to stop UK-resident individuals, including partners, and UK-resident companies carrying on a UK-taxable trade or profession, from sidestepping UK tax by channelling taxable business profits to entities located in jurisdictions with substantially lower tax than the UK. Where the rules bite, the diverted amounts are brought back into the profits of the UK trade as a counteraction. These provisions apply from 1 April 2019 for corporation tax and from 6 April 2019 for income tax and Class 4 National Insurance contributions ( NICs), covering all profits diverted on or after those dates. Background The profit fragmentation regime was announced at Autumn Budget 2017. The government argued that existing anti-avoidance rules were not adequately stopping the diversion of profits from UK businesses to offshore entities, including: diverted profits tax ( DPT) hybrids mismatch ...

PSTIA 2022 PSTIA 2022 is a two-part statute shaped over several years, drawing chiefly on the government’s 2018 Code of Practice for consumer internet of things security (the Code) and the Electronic Communications Code (see below). It was introduced with two declared policy goals: to enhance digital connectivity and stimulate UK economic growth by removing barriers to deploying essential infrastructure to strengthen the security of consumer connectable or Internet of Things ( Io T) products This Practice Note focuses primarily on PSTIA 2022, Pt 1 ( PSTIA 2022, ss 1–56), which addresses product safety alongside Io T security. PSTIA 2022, Pt 2 relates to telecommunications infrastructure and is touched on only briefly here to set the legislation in context. The Act applies to ‘relevant connectable products’ (see below), also described as Io T products or devices. While Io T has no formal legal...

Originally authored by James E. Meadows, Culhane Meadows PLLC for Lexis Practical Guidance® US, and adapted for Lexis+® UK. This Practice Note sets out the issues a customer commissioning an outsourcing should consider in engaging with the market of potential service providers, together with alternative ways to progressively narrow options at key points in the selection journey. It is intended for general commercial practitioners advising private sector business customers on outsourcing transactions, and it does not address public procurement outsourcing. In choosing a procurement route for an outsourcing agreement, there is no single strategy that suits every case; distinctive circumstances often demand a bespoke approach. For example, although clients (customers of outsourcing services) frequently favour competitive tendering, in particular situations a sole-source option can secure terms comparable to those typically achieved through formal competition, particularly where existing relationships can be leveraged or a phased path is...

IT procurement This Practice Note examines IT procurement (also known as information technology procurement, tech procurement or technology procurement), outlining the main stages in the IT procurement process, key contract documentation, the principal legal and commercial issues, and some particular cloud computing and open source software ( OSS) considerations. The emphasis is on customer concerns, while also flagging some supplier-side considerations where relevant to IT procurement. Matters unique to public sector IT procurement are not covered here; for these, see: Public sector technology sourcing—overview, and Practice Notes: Public procurement—private sector considerations and Freedom of information and public contracts......

This Practice Note This Practice Note offers practical, hands-on guidance for drafting and advising on an invitation to tender within a private commercial procurement setting. It addresses, among other matters, preparation and planning, confidentiality and intellectual property, overall approach, alternative techniques, legal status, principal issues, drafting points, contractual terms and conditions, evaluation criteria, stakeholder management and cross-border considerations relevant to such procurements. Organisations issue an invitation to tender ( ITT) (also known as a request for proposal ( RFP)) when they intend to solicit and duly assess a tender (or proposal) from two or more third party suppliers of defined goods or services (or a mix of both) and, thereafter, to enter into a contract with the supplier most capable of consistently delivering those goods or services at a competitive price. This Practice Note is designed for general commercial practitioners advising business customers on...

‘ Trust and Productivity: the private sector construction playbook’ sets out to confront long‑standing issues in UK construction: limited openness, weak productivity and a failure to back innovation. Noting that attempts to remedy these challenges have often centred on the public sector alone, it rebalances that focus by offering guidance tailored to private sector participants. The document was created by the Construction Productivity Taskforce, comprising representatives from the following organisations: BAE Systems British Land Bryden Wood Cast GPE Landsec Lendlease Mace Morrisroe Sir Robert Mc Alpine Skanska SOM Turner & Townsend Be the Business (a charity founded in 2017 to lift UK productivity by sharing know‑how from the best‑performing companies) It builds on the UK government’s Construction Playbook, which sets out the strategy for procuring and delivering public sector...

Government policy For many years, as a feature of government policy in the UK, the establishment of private pensions to sit alongside state provision has been actively promoted. This initially took the form of occupational pension schemes set up by employers for their workforces and, in later years, broadened to include personal pensions arranged by individuals themselves. The principal means of encouragement has been the granting of tax reliefs, both to those creating pension schemes and to their members, in respect of contributions, pension fund income, and pension benefits. It should also be recognised that, until very recently, neither the offering of private pensions in the UK nor membership of a pension scheme was compulsory; even now, exceptions apply (see ‘ Stakeholder pension schemes’ and ‘ Automating enrolment and the National Employment Savings Trust ( NEST)’ below). General administration of private pension schemes rests with the...

This Practice Note provides an overview of the aims, character and breadth of the structured due diligence process that a potential buyer customarily undertakes in connection with the acquisition of shares in a private limited company, or the purchase of a business together with its assets (the target)... Purpose and initial considerations for the buyer Purpose of due diligence For any share or asset deal, the buyer begins, at the outset, from the long‑standing principle of caveat emptor (let the buyer beware)... As the seller is not obliged to reveal defects in, or liabilities attaching to, the target, the buyer must carry out its own independent enquiries and verification... Accordingly, it will appoint advisers to perform thorough commercial, legal, tax, financial or other due diligence and to produce reports identifying material issues arising from their review... From the buyer’s standpoint, the core purpose of due diligence is the...

Private M& A (share sale and asset sale)—glossary of terms A Term Description Accounts date deal On a transaction priced by reference to an accounts date in a share acquisition, the purchaser sets the consideration by looking at the last audited accounts (together with any other information uncovered through due diligence), and the SPA contains no built‑in price adjustment mechanism (save to the extent of warranty or covenant claims). A straightforward accounts‑date model is now rarely adopted, as it affords the buyer no safeguard (other than the specific protections within the tax covenant) in respect of the conduct of the target (or its group) after the accounts date. For more detail, see Practice Note: Completion accounts, accounts date and locked box and tax, under the heading ‘ Accounts...

Brexit— IP completion day impact on private M& A sale and purchase agreements [ Archived] ARCHIVED: This Practice Note has been archived and is not maintained. At 11pm ( UK time) on 31 January 2020 (exit day), the United Kingdom departed the European Union pursuant to a ratified Withdrawal Agreement between the UK and the EU. From that moment, the EU has classified the UK as a ‘third country’, neither an EU Member State nor part of the European Free Trade Association ( EFTA). Throughout the Brexit implementation period, spanning exit day to 11pm UK time on 31 December 2020 ( IP completion day), the main EU regulations largely continued to apply for corporate lawyers (see Practice Note: The effect of Brexit on UK company law [ Archived]); however, on IP completion day, elements of this framework were altered. A series of...

Heads of terms Heads of terms (sometimes called an offer letter, term sheet, letter of intent or memorandum of understanding) summarise, in a succinct document, a broad outline of the parties’ expectations, understanding and accord regarding the key terms of the proposed transaction that they have agreed in principle. Where used, heads are signed at the very outset of the deal as soon as the parties settle the headline terms and before the buyer incurs expense on due diligence and the negotiation of the transaction documents. Although the heads will not oblige the parties to complete the transaction on the stated terms, or even at all, they aim to capture, in principle, the principal commercial terms of the arrangement being contemplated. There is no uniform format for heads of terms and they may take the shape of a letter (as is typical) or an...

Auction processes Auctions are central in certain sectors, notably private equity, government privatisations and other high‑value deals. Selling through an auction is structured to draw out competing offers for the company from interested buyers, aiming for the highest price on the most advantageous terms. For a seller, this route offers strong confidence that completion will occur with a preferred bidder, ideally one aligned with the management team’s perspective. Auction processes may involve a wide field of bidders, or be narrowed to a carefully chosen few, depending on the business’s characteristics and the dynamics of its market. In essence, market conditions and the company’s profile determine whether a broad or focused process is pursued. Typically, the vendor directs the process and engages specialist advisers to represent its interests; for instance, an investment bank is often retained to market the sale of the business on the...

Private fund limited partnerships and limited partnerships constituted under the Limited Partnerships Act 1907 are frequently adopted as vehicles for private equity, venture capital and property funds offered to institutional investors, such as pension schemes. For an overview of the UK private equity landscape, covering the deployment of UK limited partnerships as fund entities and the oversight of fund managers within the Alternative Investment Fund Managers Directive ( Directive 2011/61/ EU) framework, as implemented and preserved (and subsequently......

Acquiring a business through a management buyout (often termed an ‘ MBO’) is among the most commonly seen private equity-backed transactions. This Practice Note is intended to equip tax lawyers with essential background on MBOs by addressing the following questions: what are MBOs? how are MBOs typically structured? how are MBOs typically financed? what transactional steps are involved in an MBO? what are the options for private equity exit? For more detailed guidance on the tax aspects arising in an MBO, see Practice Notes: Tax and management buyouts—management shareholdings Tax and management buyouts—performance ratchets Tax and management buyouts—management shares: illustrative examples Tax and management buyouts—tax reliefs available to management Tax and buyouts—tax issues for the acquisition group Tax and buyouts—deductibility and VAT recovery of acquisition group deal costs These Practice Notes address management shareholdings, performance ratchets, illustrative examples, tax reliefs, acquisition group tax issues, and deal cost deductibility matters. For non-tax specific coverage of buyouts more...

This Practice Note outlines the UK private equity market, covering the regulation of private equity fund managers, the usual legal structures for funds and the principal industry bodies. It is designed as an introduction for readers new to the private equity arena. What is private equity? Private equity ( PE) involves providing medium- to long-term capital to companies (targets) with scope for growth, in return for the investor obtaining an equity interest (that is, shares). Targets may be privately held or quoted on an exchange such as the London Stock Exchange, although, in broad terms, PE funds more often focus on private rather than quoted or listed businesses. Investors placing capital into PE funds or PE-backed companies are typically institutional, including: Pension funds High-net-worth individuals Endowments Insurance companies Funds of funds Pension funds comprise the largest class of investors in private equity funds, and...

The key preliminaries to tackle before a contemplated private equity deal moves into the transaction execution phase are largely consistent across investment types, irrespective of whether the proposal concerns venture capital, a management buyout or buy-in, or development capital. Information about the business After deciding to sell or to pursue private equity funding, a comprehensive document must be produced that sets out, in detail, information about the business and articulates the wish and rationale for investment. In the context of a venture capital or development capital proposal, this document is most often presented as a business plan prepared by the management team; the same holds true for a buyout or buy-in where the investor or buyer has already been identified. In an auction process (that is, where the investor or buyer has not yet been identified), the equivalent document will typically take the form of an...

This Practice Note aims to: offer hands-on guidance to private equity ( PE) firms and other funds seeking to purchase a distressed or insolvent company set out practical pointers for PE firms in their capacity as shareholders of a distressed or insolvent business outline a PE firm’s standing across the main corporate insolvency and restructuring scenarios advise on steps a PE firm can take to maximise its position if a company becomes distressed In the wake of the 2007/08 credit crunch, when M& A activity was scarce, PE funds—special situations vehicles included—turned to buying distressed businesses, aiming to revive them and fold them into their portfolios. This form of distressed investing is counter-cyclical and can help diversify risk within a portfolio. Existing PE shareholders, however, should appreciate the dangers if a portfolio company moves into the ‘zone of insolvency’. In ordinary trading, creditors’ and...