December 2024

Addressing domestic abuse in financial remedy cases

Posted on 23 December 202422 March 2025 by Sarah O'Sullivan

Despite a nationwide effort to recognize the impact of domestic abuse, family courts remain reluctant to consider such abuse when determining financial settlements in divorce cases. In November 2024, the University of Bristol released a supplementary report on domestic abuse in financial remedy cases, following their Fair Shares report published in November 2023.

Domestic Abuse and Matrimonial Finances: A Neglected Factor

Grant Cameron, Chair of Resolution, introduced the Resolution Report on domestic abuse in financial remedy proceedings with a powerful statement:

“Whilst we continue to ignore the elephant in the room, we fail to protect some of the most vulnerable litigants in the family justice system.”

How Courts Currently Consider Domestic Abuse in Financial Remedy Cases

Under Section 25 of the Matrimonial Causes Act 1973 (MCA 1973), courts will only consider conduct, including domestic abuse, if it would be inequitable to disregard it. In practice, this typically means abuse is only considered when it has caused financial consequences.

Case Examples:

H v H [2005]: The husband was imprisoned for 12 years for attempting to murder his wife in front of their children. Due to the severity of the abuse, the court awarded the wife the majority of the matrimonial assets.
DP v EP [2023]: The wife concealed financial transactions from her illiterate husband, resulting in a 53% asset award to the husband and 75% of his legal costs paid by the wife.
N v J [2024]: The court clarified that while a financial consequence is not legally required to consider conduct under Section 25(2)(g), it remains a common factor in most reported cases.

Although the Domestic Abuse Act 2021 broadened the definition of domestic abuse, it did not amend the statutory definition of conduct within financial remedy proceedings.

University of Bristol’s Findings on Domestic Abuse in Financial Remedy Cases

The University of Bristol’s report highlighted several connections between domestic abuse and unfair financial settlements for victims. Key findings included:

Economic Disadvantage: Female survivors often entered divorce in a more precarious financial position than other women, resulting in limited post-divorce financial security.
Lack of Legal Representation: Only 16% of female survivors and 19% of male survivors received legal aid, with over 50% of survivors self-funding legal representation or mediation.
Post-Separation Hardship: Female survivors were more likely to be on Universal Credit and have lower household incomes up to five years after divorce.

Resolution’s Recommendations for Change

Following the University of Bristol’s report, Resolution called for a cultural shift within the family law profession to better support domestic abuse survivors. Their recommendations include:

Enhanced Case Management: Utilizing courts’ powers to tackle non-disclosure at the outset.
Recognition of Domestic Abuse: Explicitly acknowledging domestic abuse as a valid exemption from Non-Court Dispute Resolution, preventing survivors from facing unjust cost orders.
Cultural Change: Promoting awareness and training among legal professionals.
Improved Access to Legal Aid: Raising income and capital thresholds.
Interim Maintenance Support: Ensuring survivors can access financial support during proceedings.
Enforced Consequences: Imposing costs orders to deter perpetrators from using court proceedings for continued abuse.
Practice Direction: Introducing guidelines to assist legal professionals in handling domestic abuse cases.

Government Response and Future Outlook

In a positive development, the government recently launched the Early Legal Advice Pilot Project (ELAP) to provide legal support to families in disputes and gather evidence on the impact of legal advice.

While no formal government action has been taken following these reports, it is hoped that Resolution’s recommendations will drive much-needed reform. However, as with any significant legal amendments, meaningful change may take time.

Essential tips to prepare your business for sale: A seller’s guide

Posted on 19 December 202427 March 2025 by Sarah O'Sullivan

Selling a business can be complex, and often, business owners do not know how to prepare. Early preparation can be key to enabling a business sale to run smoothly. In particular, it can greatly assist the due diligence process.

Valuation

One of the first things prospective sellers should do is approach a specialist business valuer. A good idea of the company’s (‘Target’) value will assist in early negotiations regarding the sale price with the buyer. It may influence key aspects of the deal, such as whether deferred consideration is necessary from the buyer’s perspective. A business valuer will assist in ensuring that the price is realistic given the market conditions, and they will also help you to understand the risks associated with different valuations.

Tax

It is essential that sellers are informed on the tax position of the Target, as well as their own personal tax position. Certain tax reliefs may be available on the sale, such as Business Asset Disposal Relief (if the seller is an individual) or Substantial Shareholding Exemption (if the seller is a company). A tax specialist will explain how the tax will work on completion and whether any reliefs may be available to you.

Corporate Documents

In Tees’s experience, it is common for sellers not to have or not know where Target’s corporate documents are. It will be of significant benefit to the efficiency of the sale if these are obtained before the transaction gets started; the buyer’s solicitor will almost certainly request these documents as part of the due diligence process, and not having the papers can create a bad impression as to how the Target has been operated. Key documents that the buyer will likely request are:

The Target’s statutory registers including:
- Register of Members: this is essential as it shows who the legal owners of the shares are (until the shareholders are placed on the register of members, they are not legal owners of the shares and will not have legal title to sell them to the buyer).
- Register of Persons with Significant Control
- Register of Directors and their addresses
- Register of Secretaries and their addresses
- Register of Allotments
- Registers of Transfers
The Target’s minute books and key shareholder resolutions
Certificate of Incorporation
Articles of Association
Memorandum of Association
Records of any changes to the Target’s name
Evidence that any charges or debentures have been released
The corporate structure of the Target, including the shareholdings, and whether there are any holding companies or subsidiaries.
Copies of any existing Shareholders’ Agreement

Companies should have records of at least some of the above, and collating these early in the sale process will help the buyer’s due diligence get off to a good start. In addition, sellers should review Companies House and ensure all filings are current. If they are not, the seller is technically in breach of its statutory obligations, and the buyer will ask for this to be rectified before completion.

Employment Issues

Another aspect that sellers can prepare early is an anonymised list of all employees in the business, their date of birth, job roles, salary, benefits (including details of any pension scheme), and whether there are or have been any employee disputes or grievances. The buyer will ideally want copies of all employment contracts or a template employment contract if these are the same for all employees.

It would also be useful for the buyer to know whether any employees do not plan to continue working for the Target, and any implications this will have on running the Target post-completion.

Commercial Contracts

We often find sellers do not have records of their key contracts with suppliers and customers. Often, in due diligence, buyers ask for copies of agreements with Target’s top 10 suppliers and top 10 customers. Preferably, the Target will have written agreements with these companies to outline how the relationships work practically and help to minimise the risk of disputes.

A review of the contracts that the Target has in place would be a useful exercise for a corporate seller. If there is no written contract, we would advise getting one in place. All contracts should be collated to provide these to the buyer quickly.

Litigation

The buyer will inevitably need to know about any litigation that is taking place and what stage it is at. They will request copies of any agreements reached or offers made, as well as copies of all correspondence with the other party or their advisor. Sellers must give an honest account of any ongoing disputes.

The buyer will want to consider its potential liability surrounding any dispute. Sellers may be able to consider settlement with the disputing party. Buyers may want to put indemnities in place to cover any related claims post- completion.

Property

Sellers should review the Target’s property portfolio and collate all documentation relating to any properties owned or leased, as well as any licences, permits or other rights relating to the properties. Often sellers do not have these documents to hand, which can slow down the due diligence process, as it can take time to retrieve property documents from the Land Registry, Councils or other authorities.

Intellectual Property (IP)

Similarly, IP is another asset that may be included in the sale, and the buyer will want to know about all trademarks, patents, and design rights. It is good practice for a seller to organise this information into a schedule, including all registration numbers, renewal dates and the IP owner. If the owner is another company within Target’s group, the ownership of the IP may need to move to Target. It is advisable that the seller take tax advice at this event.

Summary

Early preparation for a sale can be key to its efficiency. Sellers should have early conversations about tax and valuations to assist with early negotiations with potential buyers. Sellers should also collate as much information and documentation about the Target as possible before the due diligence process, as otherwise, there can be a lot of back-and-forth with the buyer submitting additional requests for information, which can delay completion.

If you are a potential seller considering a sale of your business, don’t hesitate to get in touch with our Corporate and Commercial team to discuss how you can prepare and how we may assist you with your transaction.

Expert help for your medical negligence claim

Posted on 19 December 202423 March 2025 by Sarah O'Sullivan

If you’ve been harmed by a healthcare provider, you may be considering whether you have a medical negligence (or clinical negligence) claim. The process can seem complicated, but we’re here to guide you through it every step of the way.

What is Medical Negligence?

Medical negligence happens when a healthcare professional (such as a doctor, nurse, or hospital) provides care that falls below the expected standard, and this causes harm to you. To pursue a claim, we need to prove two main things:

1. Breach of Duty of Care

This means proving that the healthcare provider didn’t meet the proper standard of care. For example, a doctor may have failed to diagnose a condition, or a hospital may have made a mistake during surgery. If it can be shown that most other healthcare professionals in the same situation would have acted differently, then this can be considered a breach.

2. Causation

Not only do we need to show that the healthcare provider was negligent, but we also need to prove that their mistake directly caused your injury. This requires strong evidence, often in the form of an independent medical opinion, to link the negligence with the harm you’ve experienced.

Time limits for filing a claim

Claims for medical negligence generally need to be made within three years of the incident happening or when you first became aware that the injury may have been caused by negligence. This is called the “date of knowledge.”

However, there are exceptions:

Children: Claims can be made on their behalf at any time until three years after their 18th birthday.
Mental Capacity: If the person affected doesn’t have mental capacity, the time limit can be extended.

What is the process for a medical negligence claim?

Once you reach out to us, we’ll start by gathering all the relevant details and medical records about your case. This helps us determine whether there’s a valid claim. We will also work with independent medical experts to review the situation and give advice on whether there was a breach of care and if your injuries were caused by it.

After this, we’ll send a formal letter of claim to the healthcare provider, outlining the issues. They then have four months to investigate and respond, either admitting or denying responsibility. If they deny it, we will continue to build the case for you.

How is a medical negligence claim valued?

We calculate the amount of compensation based on two key areas:

1. General Damages

These cover pain, suffering, and the loss of your ability to enjoy life. The amount varies depending on the severity of your injury, but we use established guidelines and case law to estimate what’s fair.

2. Special Damages

These cover your financial losses, such as:

Loss of future income
Cost of any care or assistance you need
Medical expenses
Travel costs related to treatment
Costs for private treatment, if necessary

3. Future Losses

These are any ongoing costs or income loss that you might face due to the injury, such as:

Ongoing medical treatment
Future lost earnings

How we can help you

At Tees Law, our team of legal experts are here to help you through the process of bringing a medical negligence claim. We understand how stressful it can be, and we’re committed to supporting you every step of the way.

Delayed cervical cancer diagnosis: Medical negligence insights

Posted on 16 December 202423 March 2025 by Sarah O'Sullivan

A crucial discussion for Cervical Cancer Prevention Week 2025

Cervical cancer remains a significant health concern for women worldwide, and early diagnosis and treatment are vital. Delays in diagnosis can severely impact a patient’s prognosis, leading to more extensive treatment and, tragically, increased mortality rates.

Understanding cervical cancer

Cervical cancer is a significant public health concern in the United Kingdom. Here are some key statistics regarding cervical cancer cases in the UK:

Incidence rates: Most cases of cervical cancer are diagnosed in women aged 30-45, although it can occur at any age after the onset of sexual activity.
HPV: The primary cause of cervical cancer is a virus called high-risk human papillomavirus (HPV). High-risk HPV can cause changes in the cells of the cervix which, over time, can develop into cervical cancer.
Screening programme: The UK has a national cervical screening programme that invites women from ages 25 to 64 for regular screening. This has been effective in early detection and has reduced the incidence rates.
Vaccination impact: The introduction of the HPV vaccine has also played a role in reducing the number of cervical cancer cases, particularly among younger women who are vaccinated.
Annual cases: As of the most recent data, there were around 3,200 new cervical cancer cases in the UK every year, which is about nine cases diagnosed every day.
Survival rates: Survival rates for cervical cancer have increased over the past few decades due to better screening and treatment options. The five-year survival rate for women diagnosed with early-stage cervical cancer is relatively high.
Regional variation: There might be regional variations in incidence and mortality rates within the UK, with some areas having higher rates than others, often linked to socioeconomic factors and access to screening services.

Please note that these statistics can change over time, and for the most current data, you should refer to recent reports from sources like Cancer Research UK, the Office for National Statistics, or the NHS.

HPV

HPV is a common virus which most people (eight out of 10) get infected with at some point. In most people, it will go away within two years without causing any problems. There are many types of HPV and cervical cancer is linked to infection with high-risk types of HPV which do not go away on their own.

HPV does not cause any symptoms so cervical screening tests in England, Scotland and Wales look for high-risk HPV first and, if a screening sample is positive for high-risk HPV, a patient is invited back for cervical screening in one year (rather than in three years). If a patient has high-risk HPV three times in a row, they will be invited to colposcopy for more tests. If a patient has high-risk HPV plus cell changes, they will be invited to colposcopy for further tests.

A colposcopy is an examination normally done in a hospital or local clinic where a closer look is taken at the cervix and a biopsy may be taken. Depending on the results, treatment may be offered to remove the abnormal cells before they become cancerous or, if there is cancer present, further treatment will be offered, which depends on how large the cancer is and whether it has spread to anywhere else in the body.

Symptoms of cervical cancer

Symptoms can include:

Abnormal vaginal bleeding
Pelvic pain
Pain during intercourse
Unusual vaginal discharge

In the later stages of cervical cancer, symptoms can also include:

Unexplained pain in the lower back or pelvis
Unexplained weight loss

If women present with these symptoms, they should contact their GP. The symptoms may or may not be due to cervical cancer, but seeing a GP can ensure that they are thoroughly investigated.

However, for some women, cervical cancer does not cause any obvious symptoms which is why women need to attend their cervical screening tests (previously known as smear tests) when they are offered.

Importance of timely diagnosis

Diagnosis of cervical cancer can include investigations such as:

Cervical screening tests
Colposcopies
Biopsy
Scans
Hysteroscopy (looking inside the womb with a narrow telescope and camera)

Treatment options range from surgery to chemotherapy, depending on the stage of the cancer when diagnosed. Radiotherapy and brachytherapy are other treatments that can be offered.

Early detection is key to increasing survival rates and limiting the extent of treatment that a woman may need. A delayed diagnosis can allow the cancer to progress, leading to the need for more aggressive treatment and worse outcomes (such as a lower chance of recovery or increased risk of the cancer coming back).

Examples of negligence in diagnosis and treatment of cervical cancer

Failure to offer cervical screening tests
Failure to refer a patient to a hospital specialist for further investigations
Misinterpretation of cervical screening results
Misreporting of colposcopy results

For instance, a GP may neglect to invite a patient for cervical screening when it is due.

Alternatively, where a patient presents with symptoms such as abnormal vaginal bleeding (e.g. between periods or after the menopause), a GP may fail to make an appropriate referral for further investigation.

There are also cases where abnormal cervical screening test results are incorrectly reported as being normal, or colposcopy results are misreported as normal, thereby delaying the diagnosis of cervical cancer.

Proving medical negligence

All healthcare providers owe a duty of care to their patients. To establish a medical negligence claim, it needs to be shown that the healthcare provider breached their duty of care towards their patient (failed to provide an acceptable standard of care) and that the patient has suffered harm because of negligence (this is known as causation).

The harm suffered by a patient may be physical and/or psychiatric harm, and financial losses suffered because of the negligence are also recoverable as part of a medical negligence claim in addition to a sum of compensation for avoidable pain and suffering. It may also be possible to recover compensation for future financial losses that will be incurred as a result of the negligence (such as future medical treatment costs).

Cervical cancer prevention week 2025: Awareness

In 2023, Jo’s Trust launched its End Cervical Cancer campaign. NHS England has pledged to eliminate cervical cancer by 2040, but to make this happen, programmes for HPV vaccinations, cervical screening and treatment for cell changes need to be as effective and easy to access as possible.

We also consider that it is imperative to address the issue of delayed cervical cancer diagnosis due to negligence to bring about system improvements, professional training, and patient awareness.

The upcoming Cervical Cancer Prevention Week 2025 is an opportunity to unite in the fight against cervical cancer.

How Tees can help

Tees offers ‘no win, no fee’ agreements for the investigation of medical negligence claims – this means that no costs associated with a claim are payable unless a claim is successful. . If you win, most of your legal costs are paid by the Defendant. A small portion of your compensation may be used to cover legal costs not paid by the Defendant. The majority of our clients choose this option for peace of mind and affordability.

Our specialist lawyers are happy to give initial advice on a potential claim, advising you as to whether a claim is likely to succeed.

A number of our lawyers, including Natalie Pibworth, who is a senior solicitor in the medical negligence department at Tees, have experience in dealing with claims involving delayed diagnosis of cervical cancer and understand the sensitivity required when helping with such claims.

Our specialist lawyers are ready to assist you if you want further information or to discuss a potential claim.

Please note that the content of this article is for information purposes only and should not replace professional medical advice.

The Budget: Pains or gains for businesses?

Posted on 14 December 202419 March 2025 by Sarah O'Sullivan

On 30 October 2024, the Chancellor, Rachel Reeves, delivered the Autumn Budget (‘the Budget’). This outlined the Government’s intention to increase spending on public services by an estimated £70 billion, with more than 50% of this investment being funded through taxation. This has created a degree of uncertainty for small business owners across the UK, who may now wonder how their plans for their business will be affected.

In this insight, we will discuss the implications of several headline tax reforms for business owners, focusing on Capital Gains Tax (‘CGT’), Business Asset Disposal Relief (‘BADR’) and Investors’ Relief.

It should also be noted that the Budget included the Corporate Tax Roadmap, which promised to maintain the current 25% cap on the main rate of Corporation Tax while also retaining the small profits rate of 19%. Marginal relief will also be preserved alongside Research and Development reliefs and the capital allowances system.

CGT: What is it and what has changed?

CGT is a tax payable by the individuals on the gain (profit) made on the sale or disposal of various types of property (including shares and other business assets, but excluding your primary residence) and is charged at two rates:

a standard rate which is payable by basic rate taxpayers and
a higher rate payable by higher and additional rate taxpayers.

The Budget raised the rates at which CGT is charged to 18% for the basic rate and to 24% for the higher rate. These increases came into effect immediately from 30 October 2024.

Individuals have an annual CGT allowance of £3,000, on which CGT is not charged. It is important to remember that this allowance cannot be carried forward, so careful planning is advisable to ensure that it is used effectively and efficiently.

BADR: What is it, and what has changed?

BADR is a relief from CGT available on a lifetime allowance of £1 million of qualifying business assets. BADR is available to individuals on the disposal of:

their shares in their own company (providing they own a minimum of 5% of the share capital and voting rights for a minimum of 2 years prior to the disposal);
their interest and assets in a partnership or
in the case of a sole trader, their assets.

Currently CGT on the lifetime allowance of £1 million is charged at 10%. However, from 6 April 2025, the rate at which CGT is charged on the allowance will rise to 14% and then from 6 April 2026, this rate will rise to 18%.

Investors’ Relief: What is it and what has changed?

Investors’ Relief is designed to provide CGT relief to individual investors on qualifying investments, which include ordinary shares in an unlisted trading company. It should be noted that the shareholder will not qualify for the relief if they are a paid director or employee of the company at any point while owning the shares. There are only limited circumstances when the individual seeking relief can receive payments from the company.

Like BADR, Investors’ Relief is subject to a lifetime allowance. From 30 October 2024, the lifetime allowance was cut from £10 million to £1 million. The rate at which CGT is charged on the relief will also rise, in line with BADR, to 14% from 6 April 2025 to 18% from 6 April 2026. These rises will mean that the base rate of CGT will apply to both lifetime allowances of BADR and Investors’ Relief.

Considerations for Business Owners

Business owners will be conscious that these increases to CGT and the reduction in BADR will have an impact on any future sales. Business owners considering selling their business as part of their exit strategy may wish to review their plans, especially the timing of any sale.

The increased tax liabilities of the trading company (for example, the increase in NI contributions, which could affect the profitability of certain companies), as well as the additional tax that will be incurred on the sale of the company, will also impact the valuation of the business.

Whilst more traditional exit strategies could involve a sale to a third party or a management buyout (‘MBO’), business owners may also look to alternative ownership structures, such as a sale to an Employee Ownership Trust (‘EOT’) for a more tax-efficient disposal. CGT rates on a sale to an EOT are 0%; therefore, these increases in CGT rates might mean that EOTs are more attractive than traditional exit strategies. Such generous tax relief, while attractive, is not the only consideration when considering an EOT, and it will be important for business owners to consider the following:

the future profitability of their company, since the purchase price tends to be funded from future company profits over an extended period (five to 10 years);
whether the employees are ready for the transition, to ensure the company can sustain or grow its profitability;
whether the business owner is ready to hand over control of their business to the EOT. While a selling shareholder may continue to work in the business and sit on the board of the EOT and the company, they will not be able to form a majority on the board of the EOT, and the EOT will ultimately control their company.

As always, we recommend seeking specialist tax advice before selling a business to ensure that any deal is structured in a tax-efficient manner and that the transaction will receive the appropriate tax treatment from HMRC.

If you are considering your options for succession planning, our corporate team has extensive experience advising on all aspects of business succession planning, from sales to third parties, MBOs, and EOTs.

Employee ownership trusts: Tax-free succession explained

Posted on 13 December 202419 March 2025 by Sarah O'Sullivan

Introduced in an effort to promote employee ownership of businesses, Employee Ownership Trusts (EOTs) allow business owners to sell their shares to an employee-owned trust free from CGT and grant tax relief on bonuses of up to £3,600.

Indeed, even before the increases to CGT in the Autumn 2024 Budget, EOTs had become an ever more popular option for business owners looking to part with the ownership of their companies. EOTs are suitable for various companies and have been adopted by major retailers such as John Lewis and numerous small and medium-sized enterprises.

What are EOTs?

An EOT is a collective vehicle that purchases a controlling interest in a company and holds it on behalf of the employees. It is a type of employee benefit trust that attracts generous tax reliefs. It was introduced 10 years ago by the Finance Act 2014.

They are different from an employee share scheme, which is an arrangement whereby a small percentage of a company’s shares are reserved for its employees, who will, either immediately or at some time in the future, hold shares alongside other shareholders (usually the founder and/or outside investors) who together own most of the company.

What do EOTs involve?

The creation of a trust for the benefit of employees
which purchases shares in a trading company…
so that it holds a controlling interest in the trading company (at least greater than 50% of the ordinary shares and voting rights).
This enables a Capital Gains Tax (CGT) free disposal for selling shareholders where the shares are sold in the same tax year in which the EOT obtains control, and then
enables payment of up to £3,600 income tax free annual bonuses for qualifying employees of the trading company, which can now exclude directors.

EOTs operate:

through a corporate trustee, which holds the shares in accordance with a detailed trust deed on behalf of the employees of the trading company;
by receiving funds from the company, as and when they are available, to fund the purchase of the shares. Some consideration is usually paid on completion of the sale and the remainder deferred and paid over time, anything up to 10 years;
with a mix of executive directors of the trading company, employee representatives,Sellers and an independent professional trustee; and
on a business-as-usual basis for the trading company, but with the benefit of greater employee engagement.

EOT tax reliefs

One of the attractions of an EOT is the tax reliefs. In particular:

An individual who disposes of shares to an EOT may be eligible for relief from CGT, making any gain exempt from CGT. This also benefits minority shareholders who might not have the benefit of Business Asset Disposal Relief (formerly Entrepreneurs’ Relief); and
a company that is owned by an EOT can pay up to £3,600 each year in tax-free bonuses to its employees (this does not prevent higher bonuses being paid, just the additional party will be subject to income tax in the normal way.

There are reliefs from inheritance tax so that certain dispositions made to an EOT are not chargeable transfers of value, although selling shareholders should note that where the purchase price is to be paid in instalments and an individual who has sold their shares dies before having been paid in full, the value of any unpaid instalments will be treated as part of their estate for inheritance tax purposes. Shareholders with critical illness or older in years should discuss these implications with their tax adviser.

The EOT CGT relief is more generous than the CGT reliefs that are available for disposals to standard Employee Benefit Trusts but are also more restrictive, making it important to take advice to avoid some of the pitfalls that can wipe away these benefits.

Conditions for achieving tax reliefs

Certain conditions must be met to secure the CGT relief for the sellers and exemption from income tax on bonus payments made by the trading company to its employees.

Conditions common to these reliefs are:

The all-employee benefit requirement (although directors can now be excluded from the annual bonus).
The equality requirement (which requires that distributions must be for the benefit of all employees of a company on the same terms).
The controlling interest requirement (holding more than 50% of the ordinary share capital, voting rights and entitled to more than 50% of the profits and assets on a winding up).
The trading requirement; and
the participation requirement – the ratio between excluded participators (people who are both 5%+ shareholders and directors/company secretary or employees, including for this purpose any employees who are their relatives) and employees must not be more than 2/5 (i.e. 40%) (this is to prevent the relief being claimed in companies where there are only a few non-shareholder employees).

In addition, for CGT relief to be available, the participator or any person connected with them must not have claimed the same CGT relief in any earlier year in relation to the disposal of shares in the same company or any member of the same group.

A properly established EOT will ensure these conditions are met and, so far as possible, include controls to prevent a disqualifying event.

Disqualifying events

If any of the conditions are breached during the first four tax years after the end of the tax year in which the sale takes place (increased from the first tax year by the Autumn Budget 2024), the CGT relief can be clawed back from the Sellers resulting in CGT becoming due on the gain that occurred at the time of the disposal. Other disqualifying events will also be introduced by the Finance Bill 2024-25, taking effect from the 30 October 2024 as follows:

Trustee independence requirement: which prevents sellers or persons connected with them from retaining control of the trading company, following the sale to the EOT, via the trust arrangements.
Residence requirement: the EOT trustee must be resident in the UK (i.e. offshore trustees are no longer permitted).
Market value: the trustee(s) must take all reasonable steps to ensure that the consideration paid for the shares purchased by the EOT does not exceed market value and the interest rate on deferred consideration does not exceed commercial rates.

A disqualifying event has consequences for the Seller and/or the EOT, depending on when it occurs. If an event occurs in or before the fourth tax year following the disposal of the shares to the EOT, the Seller will be liable for CGT on the gain in the value of the shares from the Seller’s base cost at the time of disposal to the EOT. If the disqualifying event occurs after the fourth anniversary, there is a deemed disposal and immediate re-acquisition at market value by the EOT of all the shares it originally purchased, resulting in a CGT charge to the EOT. The employees will, therefore, need to factor in the tax charge as part of the costs of a future sale of the trading company owned by the EOT. If the sale occurs before the Seller has been paid in full, then that part of the proceeds will be due to the Seller, as a sale of the trading company will entitle the Seller to demand the balance of deferred consideration.

Major decisions to be made by the EOT will be within the control of the EOT trustees, usually on a unanimous basis, so there will be checks and balances before any decision that could lead to a disqualifying event.

The risks and rewards

An EOT offers several advantages, in addition to the tax benefits available to the Seller and the EOT, including:

Simpler process – as compared to a sale to a third party, where the Seller will need to provide warranties and negotiate documentation for the sale with the Buyer and have ongoing liability for a period post sale.
Flexibility – so long as the EOT has a majority interest, a Seller can choose to retain shares in the target company (noting they will not attract CGT relief when sold in the future).
Higher return – the sale proceeds are tax-free, giving the Seller greater flexibility as to the price to be paid by the EOT for the shares.
No third party is required – provided the Seller has a team that can continue the business, then it avoids the need to find a Buyer.
Preservation of identity – as ownership of the company will not be transferred to an external third party, the values and identity of the company are likely to remain the same.
Engaged employees – employees are given the opportunity to share ownership of the company, which should lead to greater engagement, innovation, and profitability, provided the terms of the sale to the EOT are reasonable.
Reduced corporation tax – where profits are being distributed using the tax free (but not NIC free) bonus, then the profits subject to corporation tax will be reduced; and
EMI schemes – it is still possible to incentivise key employees alongside the implementation of the EOT through share incentive schemes.

There are risks mostly stemming from disqualifying events that can trigger the loss of the CGT relief by the Seller or result in a deemed sale and immediate reacquisition of the sale shares, giving rise to a CGT charge, depending on when the event occurs. These risks are managed by ensuring you take advice at all appropriate times and seek assistance from professionals with expertise in EOTs.

For information, please read our article on the effect of the Autumn Budget 2024 on EOTs

How can we help?

If you are considering your options for succession planning, Tees Law has a large team that can advise you on all aspects of business succession planning, including EOTs and other employee benefit trusts. We are always happy to liaise with your tax advisers to ensure that any succession plans will work in the way that they are intended to.

Please get in touch with Tracey Dickens or Lucy Folley, who will be pleased to assist you.

Tax changes in autumn budget 2024: Making employee ownership trusts (EOTs) more appealing?

Posted on 13 December 202419 March 2025 by Sarah O'Sullivan

Capital Gains Tax (CGT) and relief changes: How do these relate to EOTs?

The Autumn Budget 2024 saw CGT rates rise to 18% and 24% with effect from 30 October 2024, up from 10% and 20% for lower and higher rate taxpayers, respectively. There are also phased changes to Business Asset Disposal Relief (BADR), it remains at 10% until April 2025 and will increase to 14% for disposals made on or after 6 April 2025 and 18% of disposals made on or after 6 April 2026.

BADR is available on qualifying capital gains arising on disposals of certain assets, including shares in trading companies, provided the shares have been held for two years before disposal, the seller has been an officer or employee of the company and holds at least 5% of the ordinary share capital. There is a £1 million cumulative lifetime limit for disposals on or after 11 March 2020.

With the CGT rates on a sale to an Employee Ownership Trust (EOT) being 0%, these increases in CGT rates might mean that EOTs are more attractive compared with a traditional sale.

Such generous tax relief, while attractive, is not the only consideration when contemplating an EOT. It will be important to consider:

The future profitability of your company, since the purchase price tends to be funded from future company profits over quite a long period of time (five to 10 years) and be able to fund growth.
Whether your employees are ready for the transition, to ensure the company can sustain or grow its profitability.
Whether you are ready to hand over control of your business to the EOT. While a selling shareholder may continue to work in the business and sit on the board of the EOT and the company, they will not be able to form a majority on the board of the trust, and the trust will have ultimate control of your company.

EOTs – What has changed?

During the Budget, the Government also announced changes to EOT legislation, following a consultation in 2023, but these are unlikely to impact EOTs greatly, with many of the practices that have been tightened up already being followed; that is certainly the case for the EOTs we at Tees have been advising on. The changes apply from 30 October 2024.

The announced changes:

Ensure that former owners (and persons connected with them) cannot retain control of the company post-sale by retaining control of the EOT.
Require that the trustees of the EOT are UK residents at the time of disposal to the EOT
Require the EOT trustee to take reasonable steps to ensure that the price paid for the company’s shares do not exceed market value.
Requires individuals to provide additional information to HMRC at the point of claiming the relief.
An increase to the timeframe within which relief can be withdrawn from the selling shareholders if there is a disqualifying event (i.e. a breach of the EOT conditions) post-disposal, extending it from the end of the first tax year to the end of the fourth tax year following disposal.
Makes a small adjustment to the conditions for obtaining Income Tax relief on annual bonuses made to employees of EOT owned companies, to allow for directors to be excluded from the bonus award.
Provides legislative certainty over the distributions tax treatment of contributions paid to the trustees of an EOT to repay the former owner for their shares, by introducing a specific relief which covers such contributions, which should mean fewer HMRC clearance applications relating to EOT transfers.

Are EOTs worth considering?

With the imminent changes in CGT, and the EOT legislative structure remaining aligned with current practice, EOTs are an attractive solution for addressing succession in some businesses. The interest in EOTs has increased in recent years, with many seeing them as a viable option that benefits their company and themselves, and we expect that trend to accelerate.

Tees Law have the expertise and experience to assist shareholders with the transfer to an EOT, protecting their interests by ensuring the documentation meets the legislative requirements and protects against the occurrence of disqualifying events.

How can we help?

If you are considering your options for succession planning, Tees Law has a large team that can advise you on all aspects of business succession planning, including EOTs and other employee benefit trusts. Please get in touch with Tracey Dickens or Lucy Folley, who will be pleased to assist you.

10 great financial advice tips for efficient money management

Posted on 12 December 202428 March 2025 by Sophie Soraf

As wealth management specialists, we are often asked, ‘Where and how do I start with my money?’ or told, ‘I never seem to have money when I need it’. Understanding how to hold and manage our hard-earned wealth is key to ensuring that we always have funds when needed.

Understanding the basics of money management is the key to finding financial freedom. Our funds fall into three main categories:

Short-term, hands-on money required for day-to-day expenses
An easily accessible ‘rainy day’ fund to cover unforeseen costs, or nice-to-have things like holidays
Long-term investments for life events, for example, saving for retirement, buying a house or paying for a child’s wedding

So, if you would like to manage your money better, read on to find out our 10 top tips for efficient money management.

1. Have a financial plan

Let’s consider the three categories of funds outlined above. Without a financial plan, how will you know how much you need in your current account to cover daily living expenses, how much you can afford to save or invest, or how much you can afford to pay towards your pension each month?

Common components of a financial plan will include:

Financial goals and objectives – where do you want to be in X years?
Income and outgoings – what are you bringing in and paying out? How much can you afford to spend without running out of money?
Protection needs – have you planned for life’s unexpected events, such as losing your job or being too ill to work for more than a few months?
Savings & investments – how much of your money do you have in savings accounts and investment portfolios? Are your savings and investments still offering strong returns? What changes might need to be made?
Retirement – are you currently saving enough for retirement?
Issues and problems – are there any weaknesses or problems that could affect your financial situation? How might these be rectified?

2. Draw up a budget

A budget is the answer if you’re continually running out of money before payday. Starting with your take-home income, first list the bare essentials – i.e., what must be paid out to keep your family sheltered, fed and warm – before moving on to those outgoings that are not so strictly necessary. In order of priority, these are the typical outgoings that feature on most budgets:

Housing costs – such as your rent or mortgage, bills and home insurance
Groceries – how much do you need to feed your family each month?
Other essential outgoings include shoes and clothing, school uniforms, car insurance and road tax, commuting costs, paying off debt, etc.
Savings – once you have prioritised your essential expenses, it is important to budget for savings, such as your emergency savings fund and pension contributions, before you budget for other daily expenses
‘Nice-to-haves’ – this category can include expenses such as eating out, leisure activities, hobbies or holidays

3. Focus on paying off debt

Nothing can derail your finances faster than accumulating high-interest debt, for example, on credit or store cards. If you use a credit card, it is essential to prioritise paying it off on time to avoid spiralling debt that can seriously harm your credit score.

To avoid debt, stick closely to your budget. If your budget says you don’t have the money to buy something this month, don’t use your credit card to do so. The repayments will eat into next month’s money and make it increasingly challenging to stay on track.

4. Save for the future

Setting aside any savings before moving on to non-essential expenses is important. To help you prioritise your savings, consider what would happen if you faced an unforeseen expense. Could you afford to pay out for a new boiler if yours broke down? Or a large veterinary bill? What if you lost your job? A general rule of thumb is to build up three months’ worth of essential outgoings in an instant access savings account for emergencies.

However, instant access accounts typically offer lower interest rates, meaning the return on your money will be minimal. If you already have sufficient emergency savings, it may be worth putting further savings away in a fixed-term savings account, which offers higher interest in exchange for locking your money away for a set period or looking into investment.

5. Invest for higher returns

With interest rates at rock bottom, savings accounts offer minimal interest on savers’ hard-earned cash. Investing is a way of getting higher returns in exchange for a certain level of risk. Stock markets can go up and down, so your investments can fall and rise; however, a financial adviser can assist you in building an investment portfolio that reflects your risk profile. This means you can choose the level of risk you want to accept (although lower risk often means lower returns).

6. Protect your loved ones

According to Royal London, just two in five people say they’d be able to cope for more than three months if they lost their income. If your situation is similar, then it’s important to put in place protection policies, such as life insurance (which pays out a lump sum to your family if you die), critical illness cover (which pays out if you develop a serious or terminal illness) or income protection insurance (which pays a percentage of your monthly income if you are too unwell to work), to safeguard your loved ones against unexpected financial blows.

7. Start contributing to your pension as soon as you start work

When you start work in your late teens or early 20s, retirement seems a lifetime away. But with living expenses rising and even the full State Pension inadequate to fund a comfortable retirement, the sooner you start saving, the more opportunity your investments will have to grow.

According to research, savers, on average earnings, will need to build a pension pot of at least £300,000 to retire well – which is likely to increase. With all employers now obliged to offer a workplace pension under the auto-enrolment scheme and to make contributions for all employees, it’s never been easier to start saving. Your contributions will be taken out of your salary along with tax and national insurance contributions, so you won’t have to worry about making space in your budget. If you are self-employed, you must contribute into a personal pension to avoid a compromised financial situation later in life.

8. Take full advantage of tax allowances

You can keep more of your hard-earned money by making the most of your yearly tax allowances. For example, you can save up to £20,000 annually into an Individual Savings Account (ISA) and pay no Income Tax on the interest or dividends received. You will not have to pay any capital gains tax on profits from investments in a stock and shares ISA. You can also pay up to £60,000 per year into your pension and benefit from pension tax relief.

Other useful tax allowances include:

Tax-free allowances on financial gifts
Capital Gains Tax annual allowance
Personal Savings Allowance

9. Make a Will

We work closely with our legal team to ensure all clients have a valid, up-to-date Will in place, recording how you would like your assets, such as property, savings and investments, to be distributed when you die. If you die intestate (i.e., without a Will), your assets will be distributed according to intestacy law, a set of rules that dictates how assets should be dealt with without a Will. If you are not married to your partner, for example, they may be unable to inherit. Having a Will also means you can plan to pass down your money in the most tax-efficient way possible.

10. Seek professional financial advice

There’s a great deal to consider when dealing effectively with your finances, so it’s no wonder many people feel overwhelmed. Seeking professional financial advice will help you manage your money better on a day-to-day basis and help you with life’s big financial decisions. Picking the best mortgage for your circumstances; putting in place adequate protection cover to keep your family safe; calculating the retirement income you’ll need and ensuring you have a solid plan in place to achieve it; helping you clear your debt and get your finances in better shape for the future… a financial adviser can help you achieve all of this and more.

To contact our financial specialists, please call 0808 231 1320, and we will be delighted to assist you.

This material is intended to be for information purposes only and is not intended as an offer or solicitation for the purchase or sale of any financial instrument. It is not intended to provide and should not be relied on for accounting, legal or tax advice, or investment recommendations. Past performance is not a reliable indicator of future returns and all investments involve risks including the risk of possible loss of capital. Some information quoted was obtained from external sources we consider to be reliable.

Tees is a trading name of Tees Financial Limited which is authorised and regulated by the Financial Conduct Authority. Registered number 211314. Tees Financial Limited is registered in England and Wales. Registered number 4342506.

How to sell a property in France

Posted on 12 December 202423 March 2025 by Sarah O'Sullivan

Selling property in France is a different experience compared to the UK, so it’s crucial to seek expert legal advice before making any commitments. At Tees, our bilingual legal specialists offer comprehensive support to ensure a smooth, stress-free transaction.

Understanding the French property market

The French real estate market often leans towards a buyer’s market, influenced by political and economic factors. While this may affect your sale price, it can also attract more potential buyers looking for opportunities.

Property valuations and Estate Agent mandates

Many estate agents provide free valuations, typically in exchange for securing a sales mandate. Ensure the mandate is non-exclusive if you’d like the flexibility to engage multiple agents. Carefully check the commission terms before signing.

Setting a realistic asking price

Pricing your property appropriately is key. Overpricing can deter buyers, especially those seeking quick transactions. Properties left on the market for extended periods may raise concerns about potential issues.

Mandatory property diagnostics

Sellers are legally required to provide diagnostic reports covering aspects such as asbestos, electricity, and energy performance. Having these reports ready or arranging them promptly can streamline the process.

The Compromis de Vente

The initial sales contract in France, known as the “compromis de vente” or “promesse de vente”, is typically drafted by the estate agent. However, it is essential to have this reviewed by a qualified lawyer. Your lawyer will:

Ensure all necessary disclosures are made.
Identify any risks or hidden defects.
Include appropriate liability exclusion clauses.

Capital Gains Tax (CGT) in France

For UK residents, French CGT is 19%, with an additional 7.5% solidarity tax, totalling 26.5%. EU residents face a higher rate of 36.2%, including social charges. Tax exemptions may apply based on ownership duration:

22 years for tax exemption.
30 years for social charges exemption.
Full exemption applies to main residences.

Avoiding common pitfalls

Misrepresenting a holiday home as a main residence to evade tax is strongly discouraged. French authorities cross-reference property records and may impose penalties for under reporting sales prices. Additionally, side payments outside the notaire’s account are illegal and can lead to severe fines.

In cases of separation or divorce, the ownership period for CGT purposes remains unaffected, provided one party continues to reside in the property.

Optimising your tax position

Sellers can reduce their taxable gain by including eligible expenses, such as renovation costs and notarial fees, in the property’s acquisition price. Our legal experts can advise on maximising these deductions.

Why choose Tees for your french property sale?

Our bilingual team offers tailored legal guidance, including:

Pre-sale advice on tax implications and seller responsibilities.
Contract reviews to ensure your interests are protected.
Liaison with notaires to negotiate terms and arrange signings.
Compliance checks on mandatory declarations and diagnostics.
Secure fund management for smooth financial transactions.

With Tees, you benefit from expert legal support at every stage of your French property sale. Contact us today for personalised advice and a hassle-free experience.

The biggest financial asset: Protection

Posted on 11 December 202428 March 2025 by Sophie Soraf

What comes to mind when considering an individual’s biggest financial asset? A house? Investments? Perhaps a classic car like the Ferrari 250 GTO? Surprisingly, the most significant financial asset is often overlooked: yourself! For business owners and employees alike, the knowledge, skills, and effort you bring to the table are what drive your income and wealth. As the saying goes, “knowledge is power,” and protecting yourself is essential.

The cornerstone of any financial plan rests on the individual generating the income. Safeguarding your income is crucial—because if it disappears, what then? All financial stability starts with a solid foundation.

To put this in perspective, consider data from the Office of National Statistics (ONS), which estimates that in 2022, the average UK worker aged 16 to 65 could earn up to £606,000 in their lifetime. Despite this, a worrying trend emerges; in 2022, only 35% of the UK population has a life policy in place. This leaves 65% of people unprotected in the event of illness, injury, or worse.

In an unpredictable world, planning for the unexpected is not just prudent; it’s essential. A well-designed protection policy can offer peace of mind and financial security for you and your loved ones.

Whether you’re looking to safeguard your family, secure your income, or provide for future needs, understanding the different policies and what they protect can help you make informed decisions and seek professional help.

There are four types of protection policies we will talk about:

Life insurance
Income protection
Family income benefit
Critical illness cover

The Importance of Protection:

Life is full of uncertainties. Whilst we cannot predict the future, we can prepare for it. Setting up a protection policy ensures that when life takes an unexpected turn, whether due to illness, injury, or an untimely death, your financial obligations remain covered. Bills still need to be paid, food still needs to be bought, and life must go on.

Protection policies are an essential part of a robust financial plan. They provide support for income loss, cover medical expenses, and ensure that loved ones remain financially secure. Let’s explore the different types of protection available.

Life insurance:

Life insurance is more than just a policy; it’s a promise. It ensures that if the policyholder passes away during the policy term, a lump sum will be paid to their chosen beneficiaries. These proceeds can help alleviate financial hardships during an already difficult time.

Life insurance is especially beneficial for those with dependents, such as children, a partner, or relatives who rely on their income. It can cover significant expenses like:

Mortgage repayments
Funeral costs
Children’s education fees
Day-to-day living expenses

The lump sum payout is tax-free and can be used however the beneficiaries see fit. This gives policyholders peace of mind, knowing that their family will remain financially stable even in their absence. For families facing the dual challenges of emotional loss and financial strain, life insurance is a vital safeguard.

Income Protection:

Have you ever considered how you would manage your finances if you could not work due to illness or injury? For most of us in the UK, our income is the greatest financial asset. It pays for the essentials: housing, bills, and food whilst simultaneously enabling us to enjoy life’s luxuries.

According to the ONS, the average gross annual earnings for full-time employees in 2024 was £37,430, so protecting this income for life essentials is vital. However, life is unpredictable, and unforeseen events can disrupt your ability to work.

Income protection insurance provides a safety net in such scenarios. If you are unable to work due to illness, injury, or other circumstances, the policy pays out a regular income—typically between 50% to 70% of your pre-tax earnings. These tax-free payments continue until you recover, retire, or reach the end of the policy term.

This type of coverage supports your everyday expenses and protects other financial assets, such as investments and savings, which you might otherwise need to dip into. Many assume they can rely on savings or family support during tough times, but this isn’t always feasible.

Family Income Benefit:

Family income benefit is a type of life insurance policy aimed towards families and those with dependants, such as children, parents, partners or siblings. It is designed to pay a regular tax-free income to your family if you were to pass away during the term of the policy.

Now what is the difference between Life insurance and Family Income Benefit? They both payout on your death, right?

Yes, however, a family income benefit pays out an ongoing monthly tax-free income, compared to a life insurance that pays out a tax-free lump sum payment.

This can provide stability for the beneficiaries who receive a steady income rather than having to manage a lump sum payout.

This policy ensures a steady cash flow to help your family with daily expenses up until the stated term period. For example, you might choose a 30-year term with a monthly payout of £1,000. If you were to pass away 10 years after taking out the policy, your beneficiaries would receive a tax-free income of £1,000 per month for the next 20 years.

Critical Illness Cover:

Critical illness cover is designed to pay out a tax-free lump sum if you were to get diagnosed with a listed “critical illness” that the policy covers, such as cancer, heart attack or stroke. Treatment for such conditions can be prolonged with the added burden of financial, emotional, physical and mental strain.

You will be entitled to receive the lump sum once you have been diagnosed with a specific illness listed under the policy. Upon receiving the lump-sum payment, it is up to you as to how you use the money, whether you want to pay off the mortgage, daily expenses, home alterations or a health-related cost. This can relieve some, if not all, financial burdens that you can face during a challenging time.

It is always important to remember that with all policies, you are paying for peace of mind for yourself and/or loved ones if the worse were to happen.

If we insure our homes and cars, why would we not insure our lives? By protecting the foundation of our financial structure, which is ourselves, this ensures you and/or loved ones have a level of financial security no matter what challenges life throws at you. You don’t build a house on loose foundations, do you?

Protect yourself – it’s the most valuable thing you can do!

Tees is a trading name of Tees Financial Limited which is authorised and regulated by the Financial Conduct Authority. Registered number 211314.

Tees Financial Limited is registered in England and Wales. Registered number 4342506.