Private equity and venture capital

This practice note gives an overview of direct taxes in the UK tax regime. It covers income tax, corporation tax and capital gains tax. It discusses the principles of calculation, rates, payment and compliance, and reliefs (such as capital allowances and research and development (R&D) relief).

This note considers the commercial and tax issues raised by the use of an earn-out structure on the sale of a company where at least part of the price paid by the buyer is calculated by reference to the performance of the target company over a period of time after the acquisition takes place.

This practice note explains the reasons for establishing an Enterprise Investment Scheme (EIS) fund. It then examines the structure of a typical EIS fund.

HMRC and the British Venture Capital Association have agreed two memoranda of understanding intended to offer certainty about valuation and tax treatment of equity interests awarded to managers of target companies and private equity and venture capital providers if certain requirements are met. These memoranda are summarised in this practice note.

This note is a general summary of the rules for calculating income for the purposes of UK income tax. It also provides links to notes describing other aspects of the UK income tax rules, such as how income is taxed and exemptions from income tax.

This note is a general summary of the principles underpinning UK income tax. It describes what income is and how it is taxed. It also provides links to notes describing other aspects of the UK income tax rules, such as calculation of income and exemptions from income tax.

This note introduces the concept, use and calculation of internal rate of return as a measure of performance in private equity investments.

This practice note deals with aspects of the UK tax treatment of employment-related securities and securities options acquired after 5 April 2008 by employees and directors who are UK resident, but not ordinarily resident (R/NOR). It also deals briefly with those who are UK resident and ordinarily resident (R/OR), but not domiciled in the UK.  

This practice note covers the tax issues that commonly arise when private equity firms invest venture and development capital in start-up and smaller companies.

This practice note explores the main tax issues arising in a private equity backed management buyout that can have an impact on the investee company or group.

Following the announcement in the 2007 Pre-Budget Report that significant changes would be made to the tax rules governing residence and domicile from 6 April 2008, an avalanche of draft legislation, clarifications, amendments and guidance was published. Further amendments and changes were made as the bill progressed through parliament. In the light of this, we published this practice note to provide, in one place, an explanation of the key changes together with links to HMRC's guidance. However, following Royal Assent to the Finance Act 2008, all the changes relating to residence, domicile and related tax issues have been incorporated into Practice Note, Residence, ordinary residence and domicile: definitions and UK tax implications for individuals. THIS PRACTICE NOTE IS NO LONGER MAINTAINED.

This note contains links to practice notes covering: the meaning of "residence" and "ordinary residence" in the context of UK taxation; the meaning of "domicile" and the UK tax implications for individuals of these concepts.

A practice note summarising the Seed Enterprise Investment Scheme (SEIS), which gives tax relief to individuals for certain investments in small unquoted trading companies.

This practice note discusses the main pre-sale tax issues to consider on a share sale. It assumes that the target company is resident and incorporated in the UK. The tax treatment of non-UK residents depends on the tax laws of their jurisdiction.

This practice note sets out the tax treatment of disposals of shares by individuals before 6 April 2008 and outlines some of the tax planning which took place before changes to the capital gains tax rules took effect on 6 April 2008. It also covers loan notes and earn-outs issued before 6 April 2008 in consideration for the sale of shares. We have retained this material as it may be useful when completing tax returns for periods to 5 April 2008 and dealing with HMRC enquiries relating to those periods.

This negotiating guide explains the purpose and rationale for the provisions that usually appear in the tax covenant on a share sale. It also explains some issues that commonly arise in negotiations and in some cases suggests additional drafting that may be useful. It is designed to accompany the long-form PLC Tax covenant: Standard document, Tax covenant: long form. It can also be used with Standard document, Tax covenant: corporate seller version and Standard document, Tax covenant: individual seller version. The section headings in the negotiating guide do not correspond to the order, or in some cases to the headings, of the equivalent provisions in these two versions. But the negotiating guide may still be helpful because the underlying principles are the same, and because all key provisions, and many other provisions, appear in all three tax covenants, as they do in most tax covenants.

A document tracking the development of certain notable pieces of proposed new legislation relating to corporate taxation.

This note is a general summary of the UK rules applying to the taxation of chargeable gains. It describes what chargeable gains are, what assets are affected, when disposals arise, the way in which gains are calculated and the manner in which they are taxed, exceptions from taxation, anti-avoidance rules and how allowable losses may be used. This note is intended as a general overview, so you should be aware that the tax treatment in a particular case may differ from the general position described in this note.

A practice note summarising the rules relating to Venture Capital Trusts (VCTs) and the tax reliefs for individuals who invest in VCTs. VCTs are listed companies which invest in unquoted trading companies.