A combination of pan-European structured finance transactions, property related investments and establishment of vehicles subject to the new UK asset holding company regime.
If you could make one change to tax, what would it be?
I would bring back UK reporting on transactions with hallmarks A to C and E from the DAC 6 Directive... On a serious note, one quick and simple change I would implement which would make the lives of all practitioners and clients easier would be to align the territorial scope of stamp duty to SDRT; the current formulation in Stamp Act 1891 s 14(4) is outdated and leads to difficult questions and conversations about the extent of anything ‘done or to be done in the UK’ and technical risks associated with UK closings for non-UK transactions. Of course, I think many of us who regularly engage with stamp taxes on securities are hopeful that the relatively recent HMRC consultation on simplification in this area (building on the work of the OTS) will lead to broader reform in the near future.
What do you know now that you wish you’d known at the start of your career?
There are so many things but three in particular stand out. First, if you are interested in a particular area of tax the more you can learn about the non-tax aspects of the transactions in that area the better. This is really helpful for analysing the tax position, but it also allows participation in better conversations with non-tax colleagues implementing the deal and it is becoming increasingly important as the courts scrutinise the commercial purpose of transactions. The more you can do this at an early stage, the less there is to scramble to pick up later on!
Second, when working with more senior tax colleagues, they will (where time allows) be much happier with a considered answer backed up by research using relevant materials than a quick answer with a hope that your speed at reaching a conclusion will impress them – it took me a while to realise my superiors were right on this one.
Third, it is good to stay in touch with departing colleagues. We are a relatively small group in the tax field and it is invaluable to be able to call on old friends to run through a problem for a second opinion, especially when it is outside your specialist area or on a piece of new and untested legislation.
Has a recent tax case caught your eye?
The decision in Burlington Loan Management v HMRC [2022] UKFTT 290, which focused on the application of the old purpose test in article 12(5) (the interest article) of the UK/Ireland double tax treaty following a debt transfer, is an interesting one. It is the first decision on the application of that article which is commonly encountered in structured finance transactions and also provides some insight into how a court may look at the similar but not equivalent principal purpose tests which have recently been inserted into many double tax treaties through the OECD multilateral instrument.
The result in the case is sensible and, following on from the widely covered recent Upper Tribunal case on unallowable purpose, it was heartening to see that the decision confirmed that knowledge of the availability of a tax benefit was not on its own enough to justify a finding there was a main purpose of taking advantage of the benefit of the interest article. However, it will be hard to rest easy until we know whether HMRC will appeal, and the decision of HMRC to bring a case to tribunal on these facts between unrelated parties is in itself a little concerning.
You might not know this about me but...
Despite ankle surgery, a series of broken arms, wrists and metatarsals and being only a week younger than Wayne Rooney I still harbour deluded and fading hopes of making it as a premiership footballer and enjoy playing five-a-side a couple of times a week. However, my colleagues (and teammates) are finally starting to convince me that the closest I am going to get to this world is reading about the recent HMRC focus on payments to football agents in Tax Journal!
A combination of pan-European structured finance transactions, property related investments and establishment of vehicles subject to the new UK asset holding company regime.
If you could make one change to tax, what would it be?
I would bring back UK reporting on transactions with hallmarks A to C and E from the DAC 6 Directive... On a serious note, one quick and simple change I would implement which would make the lives of all practitioners and clients easier would be to align the territorial scope of stamp duty to SDRT; the current formulation in Stamp Act 1891 s 14(4) is outdated and leads to difficult questions and conversations about the extent of anything ‘done or to be done in the UK’ and technical risks associated with UK closings for non-UK transactions. Of course, I think many of us who regularly engage with stamp taxes on securities are hopeful that the relatively recent HMRC consultation on simplification in this area (building on the work of the OTS) will lead to broader reform in the near future.
What do you know now that you wish you’d known at the start of your career?
There are so many things but three in particular stand out. First, if you are interested in a particular area of tax the more you can learn about the non-tax aspects of the transactions in that area the better. This is really helpful for analysing the tax position, but it also allows participation in better conversations with non-tax colleagues implementing the deal and it is becoming increasingly important as the courts scrutinise the commercial purpose of transactions. The more you can do this at an early stage, the less there is to scramble to pick up later on!
Second, when working with more senior tax colleagues, they will (where time allows) be much happier with a considered answer backed up by research using relevant materials than a quick answer with a hope that your speed at reaching a conclusion will impress them – it took me a while to realise my superiors were right on this one.
Third, it is good to stay in touch with departing colleagues. We are a relatively small group in the tax field and it is invaluable to be able to call on old friends to run through a problem for a second opinion, especially when it is outside your specialist area or on a piece of new and untested legislation.
Has a recent tax case caught your eye?
The decision in Burlington Loan Management v HMRC [2022] UKFTT 290, which focused on the application of the old purpose test in article 12(5) (the interest article) of the UK/Ireland double tax treaty following a debt transfer, is an interesting one. It is the first decision on the application of that article which is commonly encountered in structured finance transactions and also provides some insight into how a court may look at the similar but not equivalent principal purpose tests which have recently been inserted into many double tax treaties through the OECD multilateral instrument.
The result in the case is sensible and, following on from the widely covered recent Upper Tribunal case on unallowable purpose, it was heartening to see that the decision confirmed that knowledge of the availability of a tax benefit was not on its own enough to justify a finding there was a main purpose of taking advantage of the benefit of the interest article. However, it will be hard to rest easy until we know whether HMRC will appeal, and the decision of HMRC to bring a case to tribunal on these facts between unrelated parties is in itself a little concerning.
You might not know this about me but...
Despite ankle surgery, a series of broken arms, wrists and metatarsals and being only a week younger than Wayne Rooney I still harbour deluded and fading hopes of making it as a premiership footballer and enjoy playing five-a-side a couple of times a week. However, my colleagues (and teammates) are finally starting to convince me that the closest I am going to get to this world is reading about the recent HMRC focus on payments to football agents in Tax Journal!
