One minute with Kate Worthington, partner in the corporate tax team at Stephenson Harwood.
What’s keeping you busy at work?
I’ve very recently been promoted to partner at Stephenson Harwood, so the additional responsibilities and challenges have been keeping me pretty busy, along with the usual varied workload.
A big part of my practice is real estate tax, and I’m currently working on various interesting things in that sphere, including on the merger of two REITs and associated acquisition of the investment manager, the acquisition of a student accommodation block, and general structuring and funding of an income strip transaction.
If you could make one change to tax, what would it be?
I don’t think I can stick to one! An extremely practical change would be if HMRC introduced an email address for SDLT enquiries and correspondence. We’re currently in a position where even stamp duty has largely come out of the dark ages (with more to come, hopefully), but clearances, amendments to returns and all other SDLT correspondence has to be sent in hard copy by post, which you would think is less convenient for everyone involved, including HMRC.
But on the tax law side, even as a tax lawyer who generally benefits from complexity, I think it could do with simplification in a number of areas. It is too often the case that new rules are layered on top of existing rules to deal with new policy aims or perceived loopholes, and we end up with unclear, complex rules, which then have to be clarified or reduced in scope by guidance, and unintended consequences. This is true of the SDLT regime for residential property where there are standard rates, surcharges for non-resident purchasers and purchases of second homes, and a punitive flat rate. This means that when you combine these different rates with certain reliefs and the availability of mixed rates for certain transactions, there are potentially six plus ways of calculating the SDLT due. The outcome of the current consultation on dealing with perceived abuse of multiple dwellings relief and artificial mixed-use transactions could make the position even more complicated.
What do you know now that you wish you’d known at the start of your career?
Tax law is so much about analysing precisely what is happening in a transaction, and not just where the money/asset is ending up, so be prepared to need a very good working knowledge of different areas of law including the intricacies of trusts. I’d recommend any budding tax lawyers make sure they have a solid foundation in core areas of law beyond tax.
Are there any new rules that are causing a particular problem?
While the new NRCGT regime is generally good and works well, there are a few quirks we have come across. In particular, how the 75% property rich test works in the context of cell companies, i.e. on a single cell or global basis, and the application of the deemed disposal and rebasing rules where the entity making an exemption election does not own 100% of the underlying property assets. We’ve also seen some practical difficulties with who makes an exemption election in certain circumstances.
What issues have clients been raising recently?
The introduction of helpful changes to make UK private REIT structuring easier to implement has been of particular interest to certain clients. This has given rise to opportunities for clients with property investment portfolios and certain types of investors, and also a desire for clients to put in place structures where conversion into a REIT at a later stage would be workable from a practical and tax perspective.
You might not know this about me but...
I was an avid reader when younger and for some reason, probably having picked a random book from my parents’ collection, was slightly obsessed with Dick Francis (think Agatha Christie set in the world of horse-racing). I’m pretty sure I’ve read every book he’s written.
One minute with Kate Worthington, partner in the corporate tax team at Stephenson Harwood.
What’s keeping you busy at work?
I’ve very recently been promoted to partner at Stephenson Harwood, so the additional responsibilities and challenges have been keeping me pretty busy, along with the usual varied workload.
A big part of my practice is real estate tax, and I’m currently working on various interesting things in that sphere, including on the merger of two REITs and associated acquisition of the investment manager, the acquisition of a student accommodation block, and general structuring and funding of an income strip transaction.
If you could make one change to tax, what would it be?
I don’t think I can stick to one! An extremely practical change would be if HMRC introduced an email address for SDLT enquiries and correspondence. We’re currently in a position where even stamp duty has largely come out of the dark ages (with more to come, hopefully), but clearances, amendments to returns and all other SDLT correspondence has to be sent in hard copy by post, which you would think is less convenient for everyone involved, including HMRC.
But on the tax law side, even as a tax lawyer who generally benefits from complexity, I think it could do with simplification in a number of areas. It is too often the case that new rules are layered on top of existing rules to deal with new policy aims or perceived loopholes, and we end up with unclear, complex rules, which then have to be clarified or reduced in scope by guidance, and unintended consequences. This is true of the SDLT regime for residential property where there are standard rates, surcharges for non-resident purchasers and purchases of second homes, and a punitive flat rate. This means that when you combine these different rates with certain reliefs and the availability of mixed rates for certain transactions, there are potentially six plus ways of calculating the SDLT due. The outcome of the current consultation on dealing with perceived abuse of multiple dwellings relief and artificial mixed-use transactions could make the position even more complicated.
What do you know now that you wish you’d known at the start of your career?
Tax law is so much about analysing precisely what is happening in a transaction, and not just where the money/asset is ending up, so be prepared to need a very good working knowledge of different areas of law including the intricacies of trusts. I’d recommend any budding tax lawyers make sure they have a solid foundation in core areas of law beyond tax.
Are there any new rules that are causing a particular problem?
While the new NRCGT regime is generally good and works well, there are a few quirks we have come across. In particular, how the 75% property rich test works in the context of cell companies, i.e. on a single cell or global basis, and the application of the deemed disposal and rebasing rules where the entity making an exemption election does not own 100% of the underlying property assets. We’ve also seen some practical difficulties with who makes an exemption election in certain circumstances.
What issues have clients been raising recently?
The introduction of helpful changes to make UK private REIT structuring easier to implement has been of particular interest to certain clients. This has given rise to opportunities for clients with property investment portfolios and certain types of investors, and also a desire for clients to put in place structures where conversion into a REIT at a later stage would be workable from a practical and tax perspective.
You might not know this about me but...
I was an avid reader when younger and for some reason, probably having picked a random book from my parents’ collection, was slightly obsessed with Dick Francis (think Agatha Christie set in the world of horse-racing). I’m pretty sure I’ve read every book he’s written.
