Legal Practice Notes

The transport sector has a number of legal duties when bringing passengers into the UK. These are: to thoroughly verify passengers’ travel documents to stop clandestine entrants to the UK, including making sure commercial goods vehicles are properly secured to submit the specified advance electronic information to UK Border Force about passengers or crews of ships or aircraft to seek and obtain authority to carry a passenger to the UK under the Authority to Carry Scheme 2023 There are also various miscellaneous offences linked to carrier activities. Charges in relation to passengers without proper documents for passengers without proper documents UK Border Force, acting on behalf of the Secretary of State for the Home Department ( SSHD), may impose a fixed penalty of £2,000 on the owner of a ship or aircraft where a passenger arrives in the UK without the...

FORTHCOMING CHANGE relating to the tax treatment of carried interest: After a call for evidence on the tax treatment of carried interest run over summer 2024, the Autumn Budget 2024 confirmed the government’s plan to introduce an updated carried interest tax regime from 6 April 2026, positioned within the income tax system with bespoke provisions to reflect the distinctive nature of this remuneration. A consultation then examined potential new eligibility conditions for entry to the regime, with the government’s response issued in June 2025. Draft legislation for the regime was released on 21 July 2025 for inclusion in Finance Bill 2026. The rules will apply to carried interest arising on or after 6 April 2026. These measures were affirmed at the 26 November 2025 Budget, which also noted amendments to the draft to incorporate stakeholder feedback. Pending commencement of the new...

ARCHIVED: This Practice Note has been archived and is not maintained. At 11 pm ( GMT) on 31 December 2020, the Brexit transition/implementation period, entered into following the UK’s withdrawal from the EU, concluded. In UK legislation this moment is called ‘ IP completion day’. From that point, core transitional measures ceased and substantial changes started to apply across the UK’s legal regime. EU Emissions Trading System The EU Emissions Trading System ( EU ETS) operates on a cap-and-trade basis and is the world’s largest emissions trading scheme by trading volume. A ceiling is set in advance on the overall quantity of certain specified greenhouse gases that sources in the scheme, such as factories, power stations and other installations, may emit under the system. Inside this cap, businesses are allocated emission allowances, which they may buy from or sell to each other as and when...

ARCHIVED: This Practice Note is archived and not maintained. Brexit: at 11 pm ( GMT) on 31 December 2020, the transition/implementation period following the UK’s withdrawal from the EU came to an end. At that point (referred to in UK law as ‘ IP completion day’), key transitional arrangements ceased and significant changes began across the UK’s legal regime. Carbon budgets The Climate Change Act 2008 established a legally binding aim for the UK to cut greenhouse gas ( GHG) emissions by 80% against 1990 levels by 2050. To support progress towards the 2050 objective, carbon budgets are set for five-year periods. See Practice Note: Climate change—emissions targets, carbon budgets and net zero. Percentage reduction below the 1990 base year: 1st carbon budget (2008–12): 23% 2nd carbon budget (2013–17): 29% 3rd carbon budget (2018–22): 35% by 2020 4th carbon budget...

What is the UK CBAM? The UK CBAM is a forthcoming charge, scheduled by the UK government for implementation on 1 January 2027, applied to the carbon both released and embedded in imports into the UK of specified ‘products’ (set out by a list of commodity codes) whose production is highly carbon‑emission intensive. In this context, ‘products’ are goods, articles or substances manufactured or refined for sale. Products can be raw materials, energy (such as electricity or heat), component parts, or finished goods. Certain products brought into the UK from countries with a lower, or no, ‘carbon price’ will be required to pay the charge. The liability imposed by the UK CBAM will depend on the greenhouse gas ( GHG) emissions intensity embodied in the imported products and the gap between the carbon price applied in the country of origin (if any) and the carbon price that...

What is capital gains tax? When an individual sells or otherwise disposes of an asset and realises a profit that is capital in character, and which is not charged to income tax nor taxed elsewhere, a chargeable capital gain may arise. Whether a CGT charge applies is shaped by a number of conditions: the asset, the nature of the disposal, and the person making that disposal must each be of a type that can fall within CGT the disposal consideration for the asset must be identified and assessed correctly for CGT purposes the calculation of consideration minus allowable costs must deliver a positive figure, i.e. a gain (see Practice Note: CGT—how to calculate a capital gain) a relevant exemption or relief could apply to reduce or remove the charge there may be allowable losses available to set off against the gain In the UK, a distinction is drawn between sales...

FORTHCOMING CHANGE relating to call for evidence on tax support for entrepreneurs: At Budget 2025, the government issued a call for evidence (deadline: 28 February 2026) examining how existing tax incentive programmes function and exploring ways to bolster support for entrepreneurs. It reviews the impact of current reliefs and potential avenues for additional assistance to entrepreneurs within the tax system. The exercise concentrates in part on the venture capital schemes and on enterprise management incentives. It also considers investors’ relief and, in particular, invites views on how the tax framework can facilitate reinvestment by successful entrepreneurs, including the purpose and effectiveness of business asset disposal relief. Business asset disposal relief ( BADR), previously known as entrepreneurs’ relief for tax years before 2020–21, is a capital gains tax ( CGT) relief intended to encourage people to found and grow their own...

General principles For capital gains tax ( CGT) purposes, trustees are regarded as a single chargeable person in their own right, distinct from the individual trustees. Although people often speak of trusts as if they, like a company, had their own separate legal personality, it is crucial to remember they do not. The process for working out a chargeable gain arising to trustees is largely the same as that used for an individual. Trustees may choose to sell trust assets where, acting in line with their duties as trustees (see Practice Note: Trustees—duties), they believe this best serves the beneficiaries’ interests. Where trust property is in fact disposed of by an arm’s length sale to an unconnected third party, the computational rules use the consideration received for the disposal to calculate the chargeable gain. Besides actual disposals of trust property, trustees can be deemed to make a...

Conversion of a company's securities A company's securities conversion is to be regarded as a tax-neutral reorganisation. It is viewed as entailing neither a disposal of the existing securities nor an acquisition of those held following the conversion. For the taxation of chargeable gains, the security holder's interest in the company before and after the conversion is treated as the same asset. Accordingly, no new asset is treated as acquired, and no old asset as disposed of for tax purposes. Such a conversion concerns a single company and does not involve issuing additional shares or securities in respect of an existing holding, nor the alteration of rights attached to a class of shares. It applies to securities only and does not generally extend to shares. A securities conversion leaves the company's overall ownership unchanged. This reflects the position under a basic...

The rules dealing with depreciatory transactions and dividend stripping are anti-avoidance provisions. These provisions counter attempts to extract value artificially from a company by either: transferring assets between group members otherwise than at market value; or paying dividends from profits realised in periods before the relevant shares were acquired, which depress the value of that company’s shares or securities. Without such rules, value could be moved from one asset to another to overstate allowable losses on the eventual disposal of shares (or securities) in the company whose asset base has been stripped. Most depreciatory dealings arise between companies grouped for chargeable gains purposes, as a relationship of control is typically required—and exercised—to ensure that a non-arm's length transaction proceeds. The rules are also extended to apply in the same way to certain dividend stripping distributions by a company to a corporate...

FORTHCOMING CHANGES At Budget 2025, the government announced measures to be legislated in Finance Bill 2026: A reduction in the writing‑down allowance rate for main pool plant and machinery from 18% to 14%, effective from 1 April 2026 for corporation tax and 6 April 2026 for income tax—affecting companies and unincorporated businesses with main rate expenditure that does not qualify for, or predates, first‑year allowances such as the super‑deduction and full expensing. A new 40% first‑year allowance for qualifying main rate expenditure incurred from 1 January 2026, with fewer restrictions than other FYAs—primarily assisting spend not otherwise covered by the £1m annual investment allowance or existing FYAs (including full expensing). It applies to all businesses and includes assets used for leasing (excluding overseas leasing), while expenditure on cars and second‑hand assets is excluded. An extension of the 100% green...

FORTHCOMING CHANGES: At Budget 2025, the government outlined measures to be enacted via Finance Bill 2026: A reduction in the writing-down allowance rate for main pool plant and machinery from 18% to 14%, taking effect on 1 April 2026 for corporation tax and 6 April 2026 for income tax—affecting both companies and unincorporated businesses with main rate pools, including spend that does not qualify for, or predates, FYAs such as the super-deduction and full expensing. A new 40% first-year allowance for qualifying main rate expenditure incurred from 1 January 2026, with fewer limitations than other FYAs—principally advantageous where the £1m AIA or existing FYAs (such as full expensing) are not available. It will apply to all businesses and include assets used for leasing (excluding overseas leasing); cars and second-hand assets are excluded. An extension of the 100% green...

Anti-avoidance rules apply to both plant and machinery allowances and to structures and buildings allowances ( SBAs), designed to stop individuals or entities securing a tax benefit through arrangements driven by tax motives. For SBAs, the regime works by making adjustments that are just and reasonable; refer to Practice Note: Structures and buildings allowances. By contrast, the plant and machinery anti-avoidance code, contained in Chapters 16A and 17, Part 2 of the Capital Allowances Act 2001 ( CAA 2001), is wider in scope, and the balance of this Practice Note considers key elements within those provisions. Capital allowances for plant and machinery are subject to both general and targeted anti-avoidance measures. The general rules ensure that assets cannot be transferred, for instance between connected parties or in any scenario where the sole or primary purpose is not commercial, in a manner that...

Practice Note This Practice Note highlights some of the principal legal considerations to bear in mind when engaging in online trade with consumers. The term ‘consumer’ varies across statutes, yet typically denotes a natural person acting for reasons wholly or chiefly beyond that person’s trade, business, craft or profession. Broad commercial law topics—such as the state of goods, standard of services, competition, and taxation—are not examined in depth in this Practice Note. Additional legal obligations may influence particular online ventures depending on sector-specific regimes or the nature of the goods or services offered (eg rules relevant to financial services, consumer credit, ticket sales or resales, unsolicited products, auctions, gambling, or online pornography); where pertinent, these should be reviewed and likewise fall outside the scope of this Practice Note. For guidance and commentary on...

Statement of Changes HC 813 Skilled workers Qualification requirements On 22 October 2020, the Home Office unveiled extensive amendments to the Immigration Rules in HC 813, issued with an Explanatory Memorandum. These changes brought in many elements of the Home Office’s ‘ Future Points- Based Immigration System’, with most provisions commencing on 1 December 2020. HC 813 marked the first major phase in simplifying the Immigration Rules: numerous routes were introduced or revised in a single, consolidated format, aligning with aspects of the Law Commission’s recommendations. The Explanatory Memorandum explained that, when a route is simplified, it is inserted into the Rules as an Appendix to reduce complicated cross-references; this is a temporary arrangement and, once consolidation and simplification are complete, routes will sit within the main body as separate Parts. This Practice Note offers a high-level summary of the...

Updated in December 2025 Introduction The UK has long been a preferred destination for global companies setting up their first foothold in Europe. It sustains robust trading relationships with most nations worldwide—situated within Europe, yet well placed between US and Asian time zones. While geographically European, the UK is no longer part of the European Union, and organisations planning UK operations should recognise the growing legal and regulatory divergence from EU Member States. The UK contains three distinct jurisdictions: England and Wales, Scotland, and Northern Ireland. In many respects, the same or closely aligned laws apply across these jurisdictions. Nevertheless, there are notable distinctions, particularly regarding local government regulation, property transfers, and judicial frameworks. This guide concentrates on the jurisdiction of England and Wales. Further local guidance will be required if you intend to operate in Scotland or Northern Ireland. There are multiple options for...

This Practice Note explains the types of intellectual property ( IP) rights which a business might own, including trade marks, designs, copyright, databases, and patented or patentable technology. This introductory guide supports businesses as they review IP portfolios, run audits, or decide which protections to secure for their assets. IP rights are valuable assets that are critical to many businesses’ success, yet often go unrecognised. Many do not realise the breadth of rights they hold or the advantages they offer. Ensuring this IP is captured and utilised is essential. Below are the principal IP rights with details of assets a business may own. Registered trade marks: registered trade marks and pending trade mark applications. Unregistered trade marks: unregistered business and trading names; product or service names in use; plus product shapes, packaging and slogans. Design rights (registered or...

ARCHIVED This archived Practice note reviews the clawback of business investment relief ( BIR), the remittance relief for investment into UK companies. It covers: extraction of value how to avoid a chargeable remittance after a potentially chargeable event the order in which disposals are treated the interaction with the mixed funds rules the capital gains tax ( CGT) position STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime The Finance Act 2025 ( FA 2025), which received Royal Assent on 20 March 2025, legislates to abolish the remittance basis of taxation and introduce a residence-based regime from 6 April 2025. FA 2025 also replaces domicile as the key criterion for inheritance tax liability. Additional changes include amendments to the excluded property rules, removal of protected settlements status for offshore trusts, and revisions to overseas workday relief. For details on these...

Background and main requirements for the relief Business asset disposal relief ( BADR) can apply in relation to shares held in trading companies, as well as in the holding companies of trading groups, provided the requirements set out in sections 169H–169SH of the Taxation of Chargeable Gains Act 1992 ( TCGA 1992) are met. For disposals occurring on or after 6 April 2026, BADR produces a capital gains tax ( CGT) rate of 18% on lifetime chargeable gains, up to a statutory cap that applies to those gains. That limit was reduced from £10m to £1m for qualifying disposals taking place on or after 11 March 2020, by legislation introduced in the Finance Act 2020. Before 6 April 2025, the CGT rate applying where BADR was available was 10%; the Finance Act 2025 increased this to 14% with effect from 6 April 2025, and it also...

The Budget The Budget is a Parliamentary occasion where the Chancellor of the Exchequer delivers key statements on the national economy. It sets out the government’s tax intentions for the next year, and at times for later periods. Most measures due in the following tax year will already have been announced and consulted on in advance. Fresh announcements may arrive on Budget day—some, mainly anti-avoidance steps, take effect immediately. Others are scheduled to commence from a future date. The Budget also precedes the presentation of the Finance Bill to Parliament. In most years there is a single Finance Bill, though in some—such as those featuring a general election—there have been two or even three, as outlined below. Income tax and corporation tax are annual charges, so they can only be levied for a year (a tax year for income tax, or a financial year for...