I have a broad tax and employee incentives practice, with a particular focus on the asset management sector. At the moment, a number of high-profile hedge fund launches are taking up much of my time. Aside from that, I am working on a number of M&A deals, a mix of equity and non-equity based management incentive plans for asset managers, a couple of reorganisations and the usual mix of weird and wonderful queries from across our international offices. For some reason, I seem to be a magnet for all the work which has not found a more natural home elsewhere in the firm, which keeps life interesting.
If you could make one change to tax, what would it be?
After almost 20 years of trying, I have recently enjoyed some moderate success in explaining section 431 elections and AMV versus UMV without clients’ eyes entirely glazing over. However, as per the now defunct Office of Tax Simplification proposal, it would be much simpler for all concerned if the default position were reversed so that restrictions are automatically disapplied unless the employee elects otherwise. As an alternative, further clarity around the tax treatment of LLP members on the receipt of equity in related vehicles would be welcome. For example, where LLPs are part of a group, it is not unusual for LLP members to hold equity in a parent entity, but the tax rules do not adequately cater for this. The need to consider miscellaneous income/sale of occupational income case-law, the mixed member rules, etc. creates real uncertainty for clients.
What do you know now that you wish you’d known at the start of your career?
As a junior tax lawyer, there is a certain intellectual comfort and security in being a technical ‘specialist’, engrossed in the Orange and Yellow books away from the front line, and being summoned out into the light only when the tax really gets in the way of the deal. Indeed, that freedom to concentrate on the law was one of the attractions to me of qualifying into tax. However, I wish I had fully appreciated at any earlier stage the value of having a seat at the table, alongside transactional colleagues, from the earliest stages of a matter and throughout its duration. The different perspective a tax lawyer can offer can be hugely valuable to clients and colleagues, and the earlier in the process that occurs, the better.
Are there any new rules that are causing a problem?
The recent change to HMRC’s guidance regarding Condition C (capital contributions) of the Salaried Member rules has created real uncertainty for a number of asset managers (and, I expect, a much greater number of professional services firms). It is a clear moving of the goalposts by HMRC in the light of an unfavourable decision in Bluecrest and, if the TAAR is applied so literally, potentially has significant implications for many of those relying on Conditions A or B also. Many firms have been relying on Condition C since the rules were introduced in 2014 in full knowledge of HMRC, in a manner now seemingly inconsistent with HMRC’s view. The recent guidance creates huge uncertainty as to past treatment and the approach going forward. Surely it is time to go back to the original purpose of the legislation.
What should we be looking out for later this year?
Qualifying Asset Holding Companies appear to be gathering some momentum after a slow start. We are expecting to see an increase in their use now that they are becoming better understood – even if there remain a few foibles to iron out.
You might not know this about me but...
I have a fondness for karaoke. Most recently, my fellow tax partner, Mark Stapleton, and I took the Dechert international partner retreat by storm with a, well, perfectly average rendition of John Denver’s Country Roads. I do not think they were expecting the tax team to be at the front of the queue. Any suggestions for tax related numbers for this year’s event would be very welcome.
I have a broad tax and employee incentives practice, with a particular focus on the asset management sector. At the moment, a number of high-profile hedge fund launches are taking up much of my time. Aside from that, I am working on a number of M&A deals, a mix of equity and non-equity based management incentive plans for asset managers, a couple of reorganisations and the usual mix of weird and wonderful queries from across our international offices. For some reason, I seem to be a magnet for all the work which has not found a more natural home elsewhere in the firm, which keeps life interesting.
If you could make one change to tax, what would it be?
After almost 20 years of trying, I have recently enjoyed some moderate success in explaining section 431 elections and AMV versus UMV without clients’ eyes entirely glazing over. However, as per the now defunct Office of Tax Simplification proposal, it would be much simpler for all concerned if the default position were reversed so that restrictions are automatically disapplied unless the employee elects otherwise. As an alternative, further clarity around the tax treatment of LLP members on the receipt of equity in related vehicles would be welcome. For example, where LLPs are part of a group, it is not unusual for LLP members to hold equity in a parent entity, but the tax rules do not adequately cater for this. The need to consider miscellaneous income/sale of occupational income case-law, the mixed member rules, etc. creates real uncertainty for clients.
What do you know now that you wish you’d known at the start of your career?
As a junior tax lawyer, there is a certain intellectual comfort and security in being a technical ‘specialist’, engrossed in the Orange and Yellow books away from the front line, and being summoned out into the light only when the tax really gets in the way of the deal. Indeed, that freedom to concentrate on the law was one of the attractions to me of qualifying into tax. However, I wish I had fully appreciated at any earlier stage the value of having a seat at the table, alongside transactional colleagues, from the earliest stages of a matter and throughout its duration. The different perspective a tax lawyer can offer can be hugely valuable to clients and colleagues, and the earlier in the process that occurs, the better.
Are there any new rules that are causing a problem?
The recent change to HMRC’s guidance regarding Condition C (capital contributions) of the Salaried Member rules has created real uncertainty for a number of asset managers (and, I expect, a much greater number of professional services firms). It is a clear moving of the goalposts by HMRC in the light of an unfavourable decision in Bluecrest and, if the TAAR is applied so literally, potentially has significant implications for many of those relying on Conditions A or B also. Many firms have been relying on Condition C since the rules were introduced in 2014 in full knowledge of HMRC, in a manner now seemingly inconsistent with HMRC’s view. The recent guidance creates huge uncertainty as to past treatment and the approach going forward. Surely it is time to go back to the original purpose of the legislation.
What should we be looking out for later this year?
Qualifying Asset Holding Companies appear to be gathering some momentum after a slow start. We are expecting to see an increase in their use now that they are becoming better understood – even if there remain a few foibles to iron out.
You might not know this about me but...
I have a fondness for karaoke. Most recently, my fellow tax partner, Mark Stapleton, and I took the Dechert international partner retreat by storm with a, well, perfectly average rendition of John Denver’s Country Roads. I do not think they were expecting the tax team to be at the front of the queue. Any suggestions for tax related numbers for this year’s event would be very welcome.
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