One minute with James Burton, Partner at A&O Shearman.
What’s keeping you busy at work?
I asked Copilot to answer this by reference to my inbox and my calendar. Apparently, my practice ‘sits at the intersection of traditional transaction tax and increasingly sophisticated capital-solutions products’. That sounds an awful lot grander than it felt when I was doing it, but let’s go with that.
What do you know now that you wish you’d known at the start of your career?
They did not hire you because they thought you knew all the answers. They hired you because they thought that you were bright and engaged and willing to learn. Try to take the time to do that by making sure you properly understand the matter that you are advising on and trying to apply the law to it. Spending time making sure that you understand things early in your career will make your life a lot easier later on. A final point is that there are some amazing tools available to help you nowadays, but you still have to read the law.
If you could make one change to tax, what would it be?
The publication of the draft legislation to replace stamp duty and SDRT with the new securities transfer tax has rather stolen my thunder on this. A slightly broader response would be to lament the way that partnerships are treated by various parts of the tax code. Whether it is the application of the SDLT sum of lower proportions rules (especially where there are multiple partnerships involved) or the anomalies that can result from transactions involving partnerships and intangible fixed assets or just trying to figure out if it is possible to analogise commentary in SP D12 to ordinary commercial transactions that are not specifically contemplated by it, it feels like there is rarely a partnership transaction that does not throw up some head-scratching issue.
What’s topical in your world?
One type of transaction that we have seen quite often of late is where businesses are raising capital in a form that includes features that make it sit somewhere between ordinary equity and debt, whether it takes the form of preferred equity or debt with ‘equity kickers’ providing some performance-related upside. It can be pretty challenging to reconcile the different requirements of tax, accounting, security, regulatory law etc, especially where there are cross-border elements. On a recent deal, I was discussing the CGT treatment of a company that issues an option to subscribe for its own shares and explaining that a CGT liability can arise on grant of the option, but that it reverses on issue of the shares. The client definitely thought I was mad.
Are there any new tax rules that are causing a particular problem in practice?
HMRC’s pause in dealing with late- filed treaty relief claims while they undertake a review of their policies is causing material issues in practice, especially as the pause extends to not crediting treaty-entitled lenders with tax that has been withheld by the borrower because clearance had not been obtained before the payment of interest. In general (spoiler alert for our response to the consultation), I think that charging late payment interest where the treaty entitlement is clear can give rise to financial consequences for the borrower that are totally disproportionate to a compliance error where overall no actual tax is at stake.
Finally, you might not know this about me but…
I am 6' 6'', but I am not even the tallest person in my own family. I am also rubbish at basketball.
One minute with James Burton, Partner at A&O Shearman.
What’s keeping you busy at work?
I asked Copilot to answer this by reference to my inbox and my calendar. Apparently, my practice ‘sits at the intersection of traditional transaction tax and increasingly sophisticated capital-solutions products’. That sounds an awful lot grander than it felt when I was doing it, but let’s go with that.
What do you know now that you wish you’d known at the start of your career?
They did not hire you because they thought you knew all the answers. They hired you because they thought that you were bright and engaged and willing to learn. Try to take the time to do that by making sure you properly understand the matter that you are advising on and trying to apply the law to it. Spending time making sure that you understand things early in your career will make your life a lot easier later on. A final point is that there are some amazing tools available to help you nowadays, but you still have to read the law.
If you could make one change to tax, what would it be?
The publication of the draft legislation to replace stamp duty and SDRT with the new securities transfer tax has rather stolen my thunder on this. A slightly broader response would be to lament the way that partnerships are treated by various parts of the tax code. Whether it is the application of the SDLT sum of lower proportions rules (especially where there are multiple partnerships involved) or the anomalies that can result from transactions involving partnerships and intangible fixed assets or just trying to figure out if it is possible to analogise commentary in SP D12 to ordinary commercial transactions that are not specifically contemplated by it, it feels like there is rarely a partnership transaction that does not throw up some head-scratching issue.
What’s topical in your world?
One type of transaction that we have seen quite often of late is where businesses are raising capital in a form that includes features that make it sit somewhere between ordinary equity and debt, whether it takes the form of preferred equity or debt with ‘equity kickers’ providing some performance-related upside. It can be pretty challenging to reconcile the different requirements of tax, accounting, security, regulatory law etc, especially where there are cross-border elements. On a recent deal, I was discussing the CGT treatment of a company that issues an option to subscribe for its own shares and explaining that a CGT liability can arise on grant of the option, but that it reverses on issue of the shares. The client definitely thought I was mad.
Are there any new tax rules that are causing a particular problem in practice?
HMRC’s pause in dealing with late- filed treaty relief claims while they undertake a review of their policies is causing material issues in practice, especially as the pause extends to not crediting treaty-entitled lenders with tax that has been withheld by the borrower because clearance had not been obtained before the payment of interest. In general (spoiler alert for our response to the consultation), I think that charging late payment interest where the treaty entitlement is clear can give rise to financial consequences for the borrower that are totally disproportionate to a compliance error where overall no actual tax is at stake.
Finally, you might not know this about me but…
I am 6' 6'', but I am not even the tallest person in my own family. I am also rubbish at basketball.
