Tax Issues in Indemnities, Covenants & Warranties

Our trainer advises on all areas of revenue law, both corporate and personal, but has a particular interest in corporate tax matters including, acquisitions and disposals, reconstructions and demergers, MBOs, returning capital to shareholders, s425 schemes, SDLT, stamp duty and SDRT.

He has a special expertise in the taxation of insolvent companies, members' voluntary liquidations (including s110 schemes) and bankruptcy, and lectures regularly to R3 and is a member of the R3/HMRC liaison group which meet regularly to discuss issues of conflict between insolvency law and tax law.  Over the years he has been involved in advising on the tax aspects of some of the UK's major insolvencies including Maxwell, Pollypeck, BCCI, Olympia and York, Mayflower, ITVdigital, MFI, Allied Carpets, Borders, Farepak and Lehman Bros.  He is a Fellow of the Association of Business Recovery Professionals (FABRP) having passed the JIEB examinations.

 Following his call to the bar by Middle Temple in 1986 and pupillage in insolvency chambers (3/4 South Square) where he was pupil to the late Gabriel Moss QC and tax chambers (Pump Court) he joined Paisner & Co (now Bryan Cave Leighton Paisner) before moving on to Allen & Overy.  In 1993 he joined Coopers & Lybrand (now PwC) and then in 1996 Deloitte, where he was made a corporate tax partner in 1999.

In 2008, fearing he would be found dead in his hutch under a pile of budgets, appraisals and forecasts he returned to the Bar and joined Temple Tax Chambers.

The course will explain to delegates:

• The key tax and risk issues affecting the different approaches of the purchaser and seller.
• The relevance of the clauses in a typical tax indemnity/schedule/covenant.
• The approach of the courts to the interpretation of tax indemnities/schedules/covenants.
• The interaction of clauses in the SPA with those in the tax indemnity/schedule/covenant and potential areas for conflict.
• The common issues with the warranties and disclosure.

• The trainer is a barrister with over 35 years’ experience in tax who has been involved in negotiating tax indemnities/schedules/covenants and has written extensively on the subject.
• The course covers the tax indemnity/schedule/covenant from the point of view of both the purchaser and seller highlighting the key differences in approach.
• There are many examples of the clauses to be found in the typical tax indemnity/schedule/covenant.

The course provides a practical analysis of the issues that arise when drafting tax indemnities / schedules /covenants from both the point of view of the buyer and the seller and the consequent conflicts that can arise.  Where these have been the subject of litigation the relevant cases are discussed.

The course includes examples of the different clauses, what they are intended to achieve and how they aim to achieve it.

It also looks in outline at the impact of warranty and indemnity insurance on the drafting of the tax indemnity/schedule/covenant and the modifications that need to be made as a result.

Finally, it looks at some issues arising on the drafting of tax warranties and issues arising on disclosure.