While there may not have been as much M&A in the first half of the year, there has still been significant transactional activity across the firm in particular for the ECM, banking and real estate teams.
On the advisory side, a focus for clients has been debt restructuring where we have published a summary of some of the tax considerations across a number of key jurisdictions. While there are trends in the way particular structures are taxed, we also found many differences: the German treatment of debt-to-equity swaps is one to watch, as is the French requirement for the sale of a debt to be notified to the borrower.
Clients have also been concerned about the impacts of lockdown on where business activities are taking place and the tax implications that follow – concerns which should hopefully abate as lockdown eases.
Spare moments are spent puzzling about DAC 6.
If you could make one change to a tax law or practice what would it be?
I will definitely not be the first person to have used this platform to question the need for the physical stamping of stock transfer forms, but the broad success of the ‘emergency’ Covid-19 procedures has shown how little needs to change in order for the system to become vastly more workable. Processing times have improved; correspondence between the Stamp Office and user has proceeded smoothly; there is no need to print and post vast quantities of accompanying materials; and no longer are we reliant on the vagaries of the British postal system: all in all, the system is working very well. The hope is that the government and the Stamp Office use this impetus to make changes permanent going forward.
What should we look out for later this year?
The progression of the OECD discussions on digital taxation is proving fascinating. Even following the US’s withdrawal from negotiations, the OECD maintains that agreement can be reached by the end of the year. If agreement is reached in that timeframe (which must be considered unlikely), it could well be limited to pillar two. While agreement on this would be a significant achievement, it would do nothing to resolve the issues which gave rise to the digital services taxes in the UK, France and Italy. What then for these taxes? Will the UK require payment (with the first payments potentially due at the beginning of 2021)? Will France and Italy take their taxes out of abeyance for 2021? Or will these issues be resolved away from the tax arena as part of wider trade discussions? It is going to be very interesting to watch it unfold.
Has a recent case caught your eye?
It’s not a tax case, but Towergate Financial [2020] EWHC 984 (Comm) has provoked some debate. The case involved a claim under an indemnity where the time limit for a claim was stated as being ‘as soon as possible and in any event prior to ... the seventh anniversary’. The question was whether the claim had to be given ‘as soon as possible’ as a condition precedent to a claim, with the court taking the view (rightly or wrongly) that it was.
The case highlights a couple of practical points: (a) a client may be confident that ‘of course we’ll givethem notice as soon as we can’ and that to do so would only be fair, but they need to be aware that they may be suffering the draconian penalty of losing their ability to claim if they do not; and (b) the need for tax transactional advisers to be across all aspects of the drafting and not just the strictly tax bits. As ever, everything turns on the precise facts and circumstances.
How have you been occupying yourself outside of work during lockdown?
Two young kids mean that learning a new language was never really on the cards (although unfortunately they may have learnt some new words from me). In between time spent pretending to be a dog/dinosaur/Gruffalo, I have attempted to do some DIY, which will inevitably prove costly to rectify, and I have also had a couple of games of golf (where I adhered strictly to social-distancing rules by spending most of the time looking for balls in deep undergrowth).
While there may not have been as much M&A in the first half of the year, there has still been significant transactional activity across the firm in particular for the ECM, banking and real estate teams.
On the advisory side, a focus for clients has been debt restructuring where we have published a summary of some of the tax considerations across a number of key jurisdictions. While there are trends in the way particular structures are taxed, we also found many differences: the German treatment of debt-to-equity swaps is one to watch, as is the French requirement for the sale of a debt to be notified to the borrower.
Clients have also been concerned about the impacts of lockdown on where business activities are taking place and the tax implications that follow – concerns which should hopefully abate as lockdown eases.
Spare moments are spent puzzling about DAC 6.
If you could make one change to a tax law or practice what would it be?
I will definitely not be the first person to have used this platform to question the need for the physical stamping of stock transfer forms, but the broad success of the ‘emergency’ Covid-19 procedures has shown how little needs to change in order for the system to become vastly more workable. Processing times have improved; correspondence between the Stamp Office and user has proceeded smoothly; there is no need to print and post vast quantities of accompanying materials; and no longer are we reliant on the vagaries of the British postal system: all in all, the system is working very well. The hope is that the government and the Stamp Office use this impetus to make changes permanent going forward.
What should we look out for later this year?
The progression of the OECD discussions on digital taxation is proving fascinating. Even following the US’s withdrawal from negotiations, the OECD maintains that agreement can be reached by the end of the year. If agreement is reached in that timeframe (which must be considered unlikely), it could well be limited to pillar two. While agreement on this would be a significant achievement, it would do nothing to resolve the issues which gave rise to the digital services taxes in the UK, France and Italy. What then for these taxes? Will the UK require payment (with the first payments potentially due at the beginning of 2021)? Will France and Italy take their taxes out of abeyance for 2021? Or will these issues be resolved away from the tax arena as part of wider trade discussions? It is going to be very interesting to watch it unfold.
Has a recent case caught your eye?
It’s not a tax case, but Towergate Financial [2020] EWHC 984 (Comm) has provoked some debate. The case involved a claim under an indemnity where the time limit for a claim was stated as being ‘as soon as possible and in any event prior to ... the seventh anniversary’. The question was whether the claim had to be given ‘as soon as possible’ as a condition precedent to a claim, with the court taking the view (rightly or wrongly) that it was.
The case highlights a couple of practical points: (a) a client may be confident that ‘of course we’ll givethem notice as soon as we can’ and that to do so would only be fair, but they need to be aware that they may be suffering the draconian penalty of losing their ability to claim if they do not; and (b) the need for tax transactional advisers to be across all aspects of the drafting and not just the strictly tax bits. As ever, everything turns on the precise facts and circumstances.
How have you been occupying yourself outside of work during lockdown?
Two young kids mean that learning a new language was never really on the cards (although unfortunately they may have learnt some new words from me). In between time spent pretending to be a dog/dinosaur/Gruffalo, I have attempted to do some DIY, which will inevitably prove costly to rectify, and I have also had a couple of games of golf (where I adhered strictly to social-distancing rules by spending most of the time looking for balls in deep undergrowth).
