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22/03/2024
EU Competition Law Briefings 2024
The EU Competition Law Briefings have been created to provide a platform for our clients and other competition law experts to stay up to date on the developments of EU Competition Law. Every month CMS competition experts will present a recent case by the EU Commission or Community Courts during a webinar.
21/03/2024
Green derivatives demystified: Legal insights into sustainable finance
Join us for an insightful webinar as we explore the future of finance, focusing on sustainable investment and carbon offsetting strategies to support your business decisions.This webinar will be of particular value for project investment bankers, private equity investors, and companies in the energy and large manufacturing sectors, looking to enhance their strategies with sustainable and financially savvy solutions.The webinar will cover the following topics and will conclude with a Q&A ses­sion:Sus­tain­ab­il­ity-linked derivatives (SLD)Financial power purchase agree­ments­Man­dat­ory carbon offset: EU emission al­low­ances­Vol­un­tary carbon offset
13/03/2024
Cross-border Financial Services 2024 webinar series
We're delighted to announce the launch of our third season of international webinars focusing on financial regulation, starting on 13 March 2024.Wheth­er you are an in-house lawyer, compliance officer, financial analyst, risk manager, or any other professional concerned with maintaining the integrity of your organisation's financial practices, this series offers succinct 20-30 minute overviews of key industry trends and regulatory concerns across mul­tiple jur­is­dic­tions.If you have any additional topics that you would like us to add or address at one of the webinars, please contact us. Upcoming Webinars: 13 March: Spotting and avoiding red flags  What are the warning signals from firms that regulators act on?  How can you spot and address them before the regulator pounces?3 April: Handling a regulatory in­vest­ig­a­tion  How a firm can understand the regulator’s concerns and manage the investigation process.8 May: Financial crime  Sanc­tions, money laundering, market abuse and fraud - what are the key issues in your jurisdiction and what are the regulators focusing on.5 June: Preparing for a regulatory visit  How the banking regulator assesses a firm’s systems and controls: what to prepare and what to look out for.3 July: Handling a challenging ap­plic­a­tion  Your application for a licence, product approval or change in control is meeting with regulatory resistance.  How can you surmount these challenges?31 July: Dawn Raids  Un­an­nounced regulator visits are on the increase.  We look at what triggers a dawn raid, your rights if one happens, and how best to manage the consequences.4 September: Navigating the global ESG land­scape Is the regulatory reporting jigsaw puzzle causing more harm than good? We will provide an overview of the main cross-border issues impacting global financial institutions as they seek to manage ever expanding ESG regulations and discuss whether these rules are helping or hindering the action we need for change.The language of the webinar will be English.
01/03/2024
UK REITs - refocus for funds and investors
This Back to Basics note follows our key concepts briefings, which intend to provide high-level insights regarding funds fundamentals, funds vehicles and operational considerations, available here.In this Back to Basics, we look at UK Real Estate Investment Trusts (“REITs”), including their requirements, benefits and growing use for fund structures and investment by institutional type investors in UK real estate.  Background and relevance Recent changes in UK tax legislation – most recently in the Finance Act 2024 – as well as changing investor attitudes, have bolstered investor and manager appetite for UK REITs as part of a fund or as holding vehicles (“Private REITs”). They were originally introduced in 2007 for listed companies but can now be more “private” in nature and it is no longer necessary for the REIT to be traded or listed on a recognised stock exchange if the relevant ownership requirements are met. What is a UK REIT? A UK REIT is a UK tax resident company limited by shares (or a group of companies of which the principal company is a UK tax resident) that has an HMRC approved tax status for its property rental business and associated investment in real estate assets. What are the key benefits? Prominent benefits of using UK Private REITs to hold and invest in UK property include:tax efficient structure – see Tax benefits further below;use for real estate – this can be single or multi sector asset classes and includes student accommodation, private rented sector and life sciences;private REITs can be used by funds and institutional investors – see Private REIT structures below;possible use for a single asset – a REIT can hold a single commercial property of £20 million or more; and­flex­ib­il­ity – a UK REIT can be an overseas entity, provided it is a UK tax resident, and can be a group structure. It can be managed internally or externally. REITs are also permitted to hold non‑UK assets, which will be subject to local taxes, and to carry out a limited amount of non‑real estate investment activity. REIT requirements Set out below is a diagram illustrating some of the key “qualifying conditions” of RE­ITs:me­di­umThere are other conditions such as for financing, maximum holdings of shares by single corporates as well as continuing requirements. If these are not met, a tax charge can arise, or even loss of REIT status. Tax benefits A key incentive for using Private REITs is the tax efficiencies that are offered. These efficiencies include:no UK corporation tax is payable on tax derived from the property rental business: this has particularly become more favourable for investors following the uplift in main rate corporation tax from 19% to 25% in 2023. It is required to distribute at least 90% of its rental income profits;no capital gains tax is payable on profits arising from its property investments: this includes gains on the sale of qualifying UK property rich com­pan­ies;abil­ity to eliminate tax on latent gains: REITs can eliminate latent gains in property holding companies they acquire that hold UK property and can sell such property holding companies free of latent gains. This is highly desirable for purchasers when bidding for property holding companies at a gain;tax is levied at the shareholder level than at the REIT level itself: this enables certain institutional investors to claim exemptions on profits received from the property;a company acquiring REIT status is not subject to any additional tax charges for becoming a REIT; andability to reclaim withheld tax: while distributions out of its ring-fenced profits (otherwise referred to as property income distributions (“PIDs”)) made by the REIT are subject to a 20% withholding tax, these payments can be made gross where a shareholder is a UK corporate, pension fund, local authority or charity. UK companies will be liable to corporation tax on the PIDs at the current rate of UK corporation tax. Non-resident investors may be eligible to a reduced (or nil) withholding tax rate. Recent legislative amendments of REIT law Further changes to the REIT regime have recently been made by successive Finance Acts, with the most recent in the Finance Act 2024.Many of the recent amendments seek to reduce barriers to entry which we anticipate will heighten investor interest and participation in the REIT regime and create greater flexibility in fund structuring as it can accommodate REIT subsidiaries. These include:amending the non-close condition, which applies where a company is only close because it has an institutional investor as a participator, so that it is possible to trace through the intermediate holding companies to an institutional investor which is an ultimate beneficial own­er; an­dal­low­ing more fund structures to meet the “genuine diversity of ownership” condition, by allowing the fund structure to be looked at as a whole, rather than just the investing vehicle.The amendments made in the Finance Act 2024 include a change to the definition of “institutional investors” such that authorised unit trusts, open-ended investment companies and collective investment scheme limited partnerships must meet either:a “genuine diversity of ownership” condition (i.e. it is widely marketed) can be fulfilled by looking at the fund structure as a whole rather than just the investing vehicle; ora “not a close company” condition (i.e. not controlled by 5 or fewer participators). Private REIT structures It is possible for institutional investors to hold the Private REIT directly or through a fund structure if the relevant investor and other requirements are met (see 70% institutional ownership requirement in the diagram and proposed legislative changes above). Institutional investors include relevant authorised unit trust schemes, pension schemes, sovereign wealth funds, open-ended investment companies, collective investment scheme limited partnerships, other UK REITs (or overseas REIT equivalents), UK charities and certain insurance com­pan­ies.Private REITs often do not need a listing or to be traded on a recognised stock exchange.An example of a UK Private REIT structure set up as a fund is provided below.medium Luxembourg vehicles The new Luxembourg-UK double tax treaty (as explored in our separate briefing (The new Luxembourg-UK double tax treaty: key points for investors in UK real estate (cms-lawnow.com) with its new taxing right taking effect from 1 January 2024 in respect of withholding tax, and from 6 April 2024 applying to other taxes on income and gains in Luxembourg, is anticipated to have a knock-on effect on how existing UK real estate holdings should be most effectively structured where shares or interests are held by Luxembourg holding structures. This Luxembourg-UK double tax treaty, in conjunction with the UK corporation tax increasing to 25% on 1 April 2023, is expected to propel UK real estate investors further in considering the use of Private REITs in their own structuring.  Conclusion If you would like to discuss public and private REITs and their usage in funds, joint ventures or other investment structures, please contact a member of the CMS UK Funds Group.For further information on our REITs expertise, please see our separate brochure (CMS REITs | Corporate | United Kingdom | International law firm CMS).
29/02/2024
Germany: Effective activation of apps on prescription: Regulator tells...
February 2024
29/02/2024
CMS Expert Guide to plastics and packaging laws
Plastics and packaging have attracted  consumer, media and legislative interest over recent years with an array of laws being proposed to incentivise behavioural and design change. Significant reforms...
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29/02/2024
CMS Expert Guide to renewable energy
The Renewables Sector is now many decades old and considered a mature investment sector by many. Yet the issues it faces continue to evolve and grow at pace with the evolution and growth of the sector...
29/02/2024
CMS Expert Guide to real estate finance law
A clear understanding of the security available is fundamental for lenders and borrowers. To assist, CMS has launched an interactive International Guide to Real Estate Finance. This provides a clear and...
26/02/2024
CMS at Mobile World Congress
CMS lawyers are pleased to be attending the Mobile World Congress held in Barcelona on 26 – 29 February.  Below you can find an overview of our attending partners, representing a large range of jurisdictions and practice areas. To arrange a meeting, please contact the individual lawyers directly.At CMS, we are proud to have some of the leading global legal specialists in the technology, media and communications sector. Fuelled by huge customer demand for cutting-edge products and increased supply of pioneering services, the sectors of technology, media and communications have each undergone unprecedented change. Innovation is key, and so tech and telecoms suppliers, and creators and distributors of media, need to protect their investments and maximise their commercial op­por­tun­it­ies.Our global team of over 800 specialist Technology, Media and Communications (TMC) lawyers has been exposed to virtually every risk and challenge you face. With our long-standing focus on advising players, users, regulators and financiers in the sector we are best placed to deliver innovative solutions through our award-winning disputes, transactions, IP, commercial, data privacy and security, employment and tax practices.To find out more about CMS Technology, Media and Communications cap­ab­il­it­ies, vis­it our webpage belowLearn more about TMCFor further information, please see our partners attending the congress in the gallery below and an overview of all our expertise areas.
19/02/2024
CMS Expert Guide on Taxation of Crypto-Assets
Welcome to our comprehensive online guide to taxation of crypto-assets! In this guide, we provide detailed information on individual income tax rules for residents in different jurisdictions, including...
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14/02/2024
CMS Expert Guide to recognition and enforcement of judgements
Right knows no boundaries, and justice no frontiers; the brotherhood of man is not a domestic in­sti­tu­tion. (Amer­ic­an judge, 1872 – 1961)In­ter­na­tion­al clients who have successfully obtained a judicial...
12/02/2024
CMS Expert Guide to popular investment vehicles
The selection of a vehicle has a number of common themes including the location of the assets, management and the investors. Funds targeted at local investors and markets will frequently involve suitable...
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