One minute with Matthew Mortimer, a partner in Mayer Brown’s tax practice.
What’s keeping you busy at work?
Principally finance-related work: lots of securitisations and other structured finance transactions, property and acquisition financings and one very interesting Shariah compliant finance-raising. I’m also advising a UK target group on tax-related issues that have resulted from a recent leveraged acquisition. The creation of a tax efficient pan-European debt fund structure rumbles on. It’s the usual busy time at Mayer Brown!
If you could make one change to tax, what would it be?
When I’m in the midst of a complicated transaction and have to apply complicated UK taxation regimes, I frequently fantasise about a world in which tax legislation was simpler and easier to digest. Then, I have a reality check and realise that the more complex our economy, the more complicated tax legislation will become. That said, I would always counsel against rushing legislation, which, to its credit, HMRC now generally avoids, although not always – the anti-hybrid rules being a notable recent example of that, to my mind.
What do you know now that you wish you’d known at the start of your career?
Being a good tax lawyer involves being a good all-round lawyer, which requires very good drafting skills, powers of negotiation and understanding a range of laws outside the tax sphere. In my early days as a tax lawyer, I very much regretted not having done a proper finance seat at the firm where I trained on account of the department being described as an ‘unpleasant version of Dante’s Inferno’!
Are there any new rules that are causing a particular problem?
Even with the recent improvements to the regime, the UK’s anti-hybrid rules continue to cause me and, I’m sure, many others consternation in particular areas. The new QAHC proposals are interesting and something the government should be praised for. But the regime will still be complex to operate in a number of cases, not least as regards the ‘ownership condition’ and ensuring that a QAHC set up as a debt fund, for example, achieves tax neutrality and is able to return funds to investors in tax efficient ways (e.g. as capital for individuals).
Has a recent tax case caught your eye?
I have long been a follower of case law that analyses main purpose tests, the meaning of ‘tax advantage’ and related issues. So, I was very interested in the Kwik-Fit case from last year, for example, which flows interestingly from the Blackrock case the year before. The notion in relation to the unallowable purpose provisions in CTA 2009 s 441 that a taxpayer might have an effectively subconscious purpose for undertaking a particular course of action that is linked to the inevitable consequences of that course was much discussed when I first started in tax law years ago, and it’s interesting to see how it seems to have been revived in those cases, albeit apparently rejected in a different context in the more recent Allam case. The approach in Blackrock and Kwik-Fit to the just and reasonable apportionment limb in s 441 is also noteworthy, potentially offering an exclusion from this particular TAAR where a taxpayer has a commercial rationale for doing something (i.e. borrowing money) and would have done it anyway regardless of the tax advantages on offer. If only we could always use that type of defence when dealing with the various TAARs in our tax legislation!
You might not know this about me but...
The culturally sophisticated amongst us (!) will remember the fantastic collection of films known as ‘American Pie’ and how they featured ‘Band Camp’. Band Camp, or, at least, a British version thereof, was what my brothers and I constantly did as children. We were always playing and singing in bands and orchestras and choirs – every holiday, it seemed. I even played the clarinet for the National Youth Orchestra of Wales once. Good training for accuracy, mind. Coming in at the wrong time in front of some of the conductors I played for did not end well!
One minute with Matthew Mortimer, a partner in Mayer Brown’s tax practice.
What’s keeping you busy at work?
Principally finance-related work: lots of securitisations and other structured finance transactions, property and acquisition financings and one very interesting Shariah compliant finance-raising. I’m also advising a UK target group on tax-related issues that have resulted from a recent leveraged acquisition. The creation of a tax efficient pan-European debt fund structure rumbles on. It’s the usual busy time at Mayer Brown!
If you could make one change to tax, what would it be?
When I’m in the midst of a complicated transaction and have to apply complicated UK taxation regimes, I frequently fantasise about a world in which tax legislation was simpler and easier to digest. Then, I have a reality check and realise that the more complex our economy, the more complicated tax legislation will become. That said, I would always counsel against rushing legislation, which, to its credit, HMRC now generally avoids, although not always – the anti-hybrid rules being a notable recent example of that, to my mind.
What do you know now that you wish you’d known at the start of your career?
Being a good tax lawyer involves being a good all-round lawyer, which requires very good drafting skills, powers of negotiation and understanding a range of laws outside the tax sphere. In my early days as a tax lawyer, I very much regretted not having done a proper finance seat at the firm where I trained on account of the department being described as an ‘unpleasant version of Dante’s Inferno’!
Are there any new rules that are causing a particular problem?
Even with the recent improvements to the regime, the UK’s anti-hybrid rules continue to cause me and, I’m sure, many others consternation in particular areas. The new QAHC proposals are interesting and something the government should be praised for. But the regime will still be complex to operate in a number of cases, not least as regards the ‘ownership condition’ and ensuring that a QAHC set up as a debt fund, for example, achieves tax neutrality and is able to return funds to investors in tax efficient ways (e.g. as capital for individuals).
Has a recent tax case caught your eye?
I have long been a follower of case law that analyses main purpose tests, the meaning of ‘tax advantage’ and related issues. So, I was very interested in the Kwik-Fit case from last year, for example, which flows interestingly from the Blackrock case the year before. The notion in relation to the unallowable purpose provisions in CTA 2009 s 441 that a taxpayer might have an effectively subconscious purpose for undertaking a particular course of action that is linked to the inevitable consequences of that course was much discussed when I first started in tax law years ago, and it’s interesting to see how it seems to have been revived in those cases, albeit apparently rejected in a different context in the more recent Allam case. The approach in Blackrock and Kwik-Fit to the just and reasonable apportionment limb in s 441 is also noteworthy, potentially offering an exclusion from this particular TAAR where a taxpayer has a commercial rationale for doing something (i.e. borrowing money) and would have done it anyway regardless of the tax advantages on offer. If only we could always use that type of defence when dealing with the various TAARs in our tax legislation!
You might not know this about me but...
The culturally sophisticated amongst us (!) will remember the fantastic collection of films known as ‘American Pie’ and how they featured ‘Band Camp’. Band Camp, or, at least, a British version thereof, was what my brothers and I constantly did as children. We were always playing and singing in bands and orchestras and choirs – every holiday, it seemed. I even played the clarinet for the National Youth Orchestra of Wales once. Good training for accuracy, mind. Coming in at the wrong time in front of some of the conductors I played for did not end well!
