Tax Insurance

The sale of an Italian hotel and its quotas (i.e. shares) led to a complication in registration tax.

A non-resident company wished to dispose of an Italian software company.

A leasing group in the Netherlands and Belgium was being sold. The buyer queried historic royalty payments and whether they should have been exempt from withholding tax under the Netherlands-Belgian double tax treaty.

A large PE house was purchasing an Italian real estate portfolio.

A fund was investing in the renewables sector and had modelled its future cashflows as well as its tax deductibility position on interest.

A French business which was heavily reliant on IP assets was being sold. The seller’s advisors had identified a risk on some of the technical elements of the participation exemption regime.

A Korean fund via SPV based in Luxembourg intended to acquire a warehouse located in Poland owned by a Polish company. Due to the transaction being planned in a short period, obtaining an tax ruling confirming the tax treatment of the acquisition was not possible before closing.

A Canadian oil and gas company had accumulated various tax losses in the course of its trade. The company was being sold via a merger and the buyer sought protection from the risk of the losses being denied.

A global developer of renewables assets had disposed of a portfolio of South African assets to a Private Equity buyer. The Buyer’s due diligence exercise flagged a previous assignment of shareholder debt in the Target as potentially giving rise to a tax charge.

A large Luxembourg based private equity house was intending to pay a number of significant cross-border pre-sale dividends from several local investment companies to their parent company.  The PE house considered that the payment of the dividends should be exempt from withholding under the EU Parent Subsidiary Directive.

A client identified a risk in relation to an Italian PropCo they owned in connection with a historic partial waiver of a shareholder loan.

Risk of a charge to corporate income tax and trade tax for a German fiscal group.

A buyer of real estate was acquiring a piece of commercial real estate in Hamburg which was multi-tenanted.

A large international telecoms company had carried out a demerger and carve-out of assets as part of a historic sale.  The restructured company was now being purchased.

A large European agricultural trading business was seeking to acquire farmland in Romania.

A publicly listed European commercial real estate group was seeking to acquire a number of real estate assets in Serbia.

A UK company in the IT services sector was being sold to a US buyer and the seller pro actively sought insurance against a risk it had been mitigating within its business.

A company devoted to education developed a method of learning mathematics, programming, reading and comprehension for children from 4 to 14 years old. Educational services are VAT exempt in Spain, however, there is some uncertainty in the VAT treatment when digital processes are used to deliver the services.

A developer of Spanish Real Estate was in the process of disposing of assets and was anticipating the declaration of a large liquidation dividend from their Spanish development company to their Luxembourg holding entity.

A PE firm sold its investment in a company which holds and operates student accommodation real estate investments located in Spain.

A financial institution undertook an intra-group restructuring where it would only be prepared to conduct such restructuring if it did not lead to significant tax charges.

A financial institution was acquiring a portfolio of interests which included certain French real estate assets.  A French RETT risk was identified in relation to certain of the entities to be acquired and the financial institution was not willing to bear any risk in respect of matters arising out of the structuring of the target entities.

A large Luxembourg private equity house was intending to pay a large dividend from its local investment company in France prior to sale.  The PE house considered that the payment of the dividends should be exempt from withholding under the EU Parent Subsidiary Directive.

There were multiple programmes of insurance put in place to cover the risk of Dutch withholding tax on various transactions. We did not participate in the first two rounds and liked this particular risk.

We were approached by the broker to insure certain tax risks for a large PE firm who we regularly place policies for. The PE firm was in the process of divesting its shareholding in a trading business which is held through a Dutch and Luxembourg holding structure.

A corporate buyer was acquiring a business from a private equity seller. The buyer wanted protection against the risk it inherited secondary tax risk from the seller’s group.

A leasing group in the Netherlands and Belgium was being sold. The buyer queried historic royalty payments and whether they should have been exempt from withholding tax under the Netherlands-Belgian double tax treaty.

A large PE fund was purchasing an Irish incorporated entity as part of a larger staged investment (in excess of EUR 200m).

A private equity owned retail business was being sold to a listed buyer who required that a restructuring took place before they acquired the business: such restructuring required certain amendments to be made to the articles of the company. The management team benefited from equity in the company subject to conventional restrictions and hurdles.

A large company involved in the exploration, development, production and transportation of oil and gas was disposing of its shareholding in a UK subsidiary which they acquired in 2012. The advisors were advising on whether SSE would apply to the disposal. Separately, following the acquisition in 2012, various disputes arose between the sellers and the initial purchaser and the initial purchaser received a large sum of money under a settlement agreement.

A Luxembourg-based private equity fund holding UK industrial properties received an unsolicited offer to buy the shares in the property-holding companies. The commercial terms of sale were acceptable to the seller as they had reached their targeted IRR in advance of their anticipated exit.

A provider of affordable rental housing whom we have insured in the past approached us to provide a further policy on the inherent SDLT risk which arises when they acquire properties from developers which are acquired once the developers have begun construction works.

We were approached by a Big 4 advisor to insure a forward looking UK permanent establishment risk for their European client. They were seeking a limit of £36m.

A Canadian company had received notice of an audit from the CRA and provided information in response to questions and information requests but no follow up had been received for several years.

An investor in the renewables sector was purchasing a large solar site in the UK. As part of its financial model it had include the future availability of capital allowances. 

A corporate group were looking for an external investor to acquire a minority stake in the business to fund the exit of one of the owners and the further capitalisation of the business. As part of the structuring of the transaction, a concern was raised around the potential application of the transactions in securities rules.

A small, employee-owned UK business had issued enterprise management incentive (“EMI”) options to employees to encourage the success of the business. The EMI rules grant tax benefits to employees on an exit event.

A media group was being sold and undertook a pre-sale re-organisation to hive off parts of the company which the US buyer did not wish to buy. The seller’s tax advisors prepared a steps paper and accompanying tax advice which raised a tax risk. 

A distressed asset was being sold by a liquidator to a large corporate buyer. 

The diligence team could not trace an original option to tax for VAT purposes such that there was doubt as to whether or not the liquidator should charge VAT to the buyer.

A private equity fund was transferring a portfolio company it owned to a new fund with new investors as the business was performing well and the fund wished to retain the business. The business is in a sector where there has been significant VAT litigation and was always monitoring its VAT position. 

Two parties to the sale of a high-value real estate asset considered that the transfer should be the transfer of a going concern. The buyer was not prepared to risk 20% of the sales proceeds being subject to VAT if HMRC queried the tax treatment in the future.

A founder of a specialist manufacturing business wanted to sell the business as he was approaching retirement age. His tax advisors were advising him on substantial shareholding exemption for the company and also on his own entrepreneurs’ relief exemption in relation to his shareholding. 

A Luxembourg based private equity house was intending to sell off a large portfolio of regional offices. 

A seller of London office blocks held through partnerships entered into a pre-sale re-organisation in order to meet structural requirements imposed by the buyer. 

The seller of a target was looking to clear a number of intra-group loan balances prior to the sale of the target.

The buy side tax due diligence flagged a concern over residence risk with a quantum of £3m but due to the limit requested the W&I policy providers would not wrap the risk into the W&I policy. 

A private equity fund were buying a portfolio of student accommodation located in various cities across the UK. Both the vendor due diligence and buy side tax analysis flagged a concern over residence risk with a quantum in excess of £50m.