One minute with Kathleen Russ, head of tax at Travers Smith.
You are the head of tax at Travers Smith. What’s in your in-tray?
A real mixture of things. For me, that is one of the great attractions of my role.
As a tax lawyer, I advise on all aspects of private equity taxation. I have been immersed in this area since 2001 and it continues to fascinate me. There is a real intellectual challenge in successfully intertwining tax and other legal considerations within the time constraints of a commercially driven transaction. I continue to thrive on that challenge and am fortunate to have a continuing diet of high value, complex, transactions to work on.
Alongside my fee earning role, I head up a busy seven partner tax practice and sit on the firm’s Partnership Board. The responsibilities and challenges of both roles stretch me well beyond my normal legal skill set.
I am also passionate about diversity and part of my in-tray relates to initiatives in this area. I strongly believe that a diverse, inclusive, workforce will positively contribute to a high performing environment. To achieve this diversity, the most talented individuals need to be given an equal opportunity to achieve, irrespective of gender or other personal characteristics. All of us have personal accountability for success in this area, but as a senior female partner, I am acutely aware of the particular influence I have as a role model to others.
What’s the number one practical issue on tax for your clients?
The main challenge is uncertainty of legislation and lack of continuity of tax treatment. My clients often enter into a new investment or other commitment based on an understanding of tax legislation, and having taken this tax treatment into account when preparing their financial models. Where the tax treatment changes mid-way through the holding period of the investment, or mid-way through a fund's life, that can prove highly disruptive. In the long term, continuing changes of this type may damage the reputation of the UK as a good business environment.
Comment on a tax measure that is currently subject to consultation.
I am concerned about the practical impact of the measures proposed in the consultation on the taxation of performance linked rewards paid to asset managers. This is another example of a change which might affect clients in existing structures. The proposed difference in tax treatment between investors and fund managers will be hugely administratively burdensome. It is also difficult to understand on logical grounds. Why should investors and carry holders have a separate set of rules to determine whether they are trading?
If you could make one change to UK tax law or practice, what would it be?
Stamp duty is ripe for either abolition (accompanied by an extension to SDRT) or a legislative re-write. The law is a jungle of rules and exemptions, spread across a tangled web of acts and regulations which can be difficult for more junior lawyers to navigate. Some elements of stamp duty are also archaic and its extraterritorial scope is out of step with modern principles of taxation. The practicalities of stamping documents have also become increasingly difficult in recent years.
What advice would you give to someone new to the profession?
To be a tax lawyer, you have to thrive on the intellectual challenge presented by complex and ever changing legislation. To be a transactional tax lawyer, you also have to love the thrill of a deal and the pace, adrenaline and deadlines of a transaction. For people who enjoy those challenges, the job can be both hugely rewarding and exhilarating.
Tell us what you think about the draft DoTAS regulations
Although I am supportive of the government's desire to be informed of tax avoidance at an early stage, I am concerned by the breadth of the proposed new financial products hallmark, which is currently still in draft form. The proposed new hallmark is so widely drafted that it will require the disclosure of innocuous, benign circumstances in addition to genuine tax avoidance schemes. This is counter-productive as HMRC will need extra resources to sift through the deluge of disclosures. Given that the notifiability of arrangements under DoTAS is increasingly being used as an indicator of aggressive tax planning, it is more important than ever that the DoTAS hallmarks remain carefully targeted.
Finally, you might not know this about me but …
A big part of my life focuses on sport. My sporting background was in hockey in which I was awarded an Oxford blue when playing in the Varsity match against my sister. Now, my sporting life revolves around my teenage children. Both represent England at badminton and they, and I, dream about a day when they compete at the Olympics...
One minute with Kathleen Russ, head of tax at Travers Smith.
You are the head of tax at Travers Smith. What’s in your in-tray?
A real mixture of things. For me, that is one of the great attractions of my role.
As a tax lawyer, I advise on all aspects of private equity taxation. I have been immersed in this area since 2001 and it continues to fascinate me. There is a real intellectual challenge in successfully intertwining tax and other legal considerations within the time constraints of a commercially driven transaction. I continue to thrive on that challenge and am fortunate to have a continuing diet of high value, complex, transactions to work on.
Alongside my fee earning role, I head up a busy seven partner tax practice and sit on the firm’s Partnership Board. The responsibilities and challenges of both roles stretch me well beyond my normal legal skill set.
I am also passionate about diversity and part of my in-tray relates to initiatives in this area. I strongly believe that a diverse, inclusive, workforce will positively contribute to a high performing environment. To achieve this diversity, the most talented individuals need to be given an equal opportunity to achieve, irrespective of gender or other personal characteristics. All of us have personal accountability for success in this area, but as a senior female partner, I am acutely aware of the particular influence I have as a role model to others.
What’s the number one practical issue on tax for your clients?
The main challenge is uncertainty of legislation and lack of continuity of tax treatment. My clients often enter into a new investment or other commitment based on an understanding of tax legislation, and having taken this tax treatment into account when preparing their financial models. Where the tax treatment changes mid-way through the holding period of the investment, or mid-way through a fund's life, that can prove highly disruptive. In the long term, continuing changes of this type may damage the reputation of the UK as a good business environment.
Comment on a tax measure that is currently subject to consultation.
I am concerned about the practical impact of the measures proposed in the consultation on the taxation of performance linked rewards paid to asset managers. This is another example of a change which might affect clients in existing structures. The proposed difference in tax treatment between investors and fund managers will be hugely administratively burdensome. It is also difficult to understand on logical grounds. Why should investors and carry holders have a separate set of rules to determine whether they are trading?
If you could make one change to UK tax law or practice, what would it be?
Stamp duty is ripe for either abolition (accompanied by an extension to SDRT) or a legislative re-write. The law is a jungle of rules and exemptions, spread across a tangled web of acts and regulations which can be difficult for more junior lawyers to navigate. Some elements of stamp duty are also archaic and its extraterritorial scope is out of step with modern principles of taxation. The practicalities of stamping documents have also become increasingly difficult in recent years.
What advice would you give to someone new to the profession?
To be a tax lawyer, you have to thrive on the intellectual challenge presented by complex and ever changing legislation. To be a transactional tax lawyer, you also have to love the thrill of a deal and the pace, adrenaline and deadlines of a transaction. For people who enjoy those challenges, the job can be both hugely rewarding and exhilarating.
Tell us what you think about the draft DoTAS regulations
Although I am supportive of the government's desire to be informed of tax avoidance at an early stage, I am concerned by the breadth of the proposed new financial products hallmark, which is currently still in draft form. The proposed new hallmark is so widely drafted that it will require the disclosure of innocuous, benign circumstances in addition to genuine tax avoidance schemes. This is counter-productive as HMRC will need extra resources to sift through the deluge of disclosures. Given that the notifiability of arrangements under DoTAS is increasingly being used as an indicator of aggressive tax planning, it is more important than ever that the DoTAS hallmarks remain carefully targeted.
Finally, you might not know this about me but …
A big part of my life focuses on sport. My sporting background was in hockey in which I was awarded an Oxford blue when playing in the Varsity match against my sister. Now, my sporting life revolves around my teenage children. Both represent England at badminton and they, and I, dream about a day when they compete at the Olympics...
