A review of a book by By Richard Bramwell QC, John Lindsay, Alun James, Julian Hickey, Michael Collins Published by Sweet & Maxwell

Introduction

Times change, and so does tax law and practice. The regularity and sheer volume of tax changes these days can seem overwhelming. Tax publications must therefore move with the times. A useful tax publication is one that translates voluminous and often complex tax legislation and provides clear, concise commentary, supported by numerous practical illustrations. ‘Taxation of Companies and Company Reconstructions’ ticks these boxes and more in my view.

How has this publication moved with the times? Since I last reviewed the title for TaxationWeb in June 2006 (see below) ‘Taxation of Companies and Company Reconstructions’ has significantly changed in terms of format. For example, back in June 2006 it comprised five parts. The current version is separated alphabetically into divisions A to W. The chapters within those divisions are also shorter than before. This allows users to find the subject that they are looking for with minimal effort.

Compliance and Litigation

What else has changed? There is now a division dedicated to ‘Compliance and Litigation’. This new division is undoubtedly a reflection of the extensive powers acquired by HM Revenue & Customs in recent years. It contains six chapters, covering subjects including Self-Assessment, collection of tax, determinations, enquiries and discovery, information and inspection powers, penalties and reviews and appeals.

EU Law

In addition, there is now a division devoted to EU Law. This is perhaps a further sign of the times, with international trade seemingly becoming more commonplace, and European law therefore assuming greater prominence. The EU Law division includes chapters dealing with the framework of European Law, EC Treaty freedoms, conformity of UK tax laws to European Law, Double Tax Treaties and EU Directives and Regulations. These subjects are covered in a very clear and concise way, supported by diagrams to aid comprehension.

Amidst all the structural improvements to ‘Taxation of Companies and Company Reconstructions’, it was reassuring to note that some things have not changed. The quality and technical depth of the commentary remains highly impressive. Unlike some other publications, this one does not replicate the legislation. The commentary assimilates statute and case law, and develops the subject matter in a very helpful and practical way.

The panel of authors has changed slightly over the years, but the level of expertise remains impressive. The present co-authors comprise members of the tax bar and practitioners from Linklaters and Berwin Leighton. Since becoming a published author myself it has been much easier to recognise and appreciate the skill and care of other authors. So I must compliment the co-authors of ‘Taxation of Companies and Company Reconstructions’ for making such wide ranging and in parts complex subject matter so relatively easy to comprehend and digest. For example, the commentary appears to be structured to gradually expand in technical detail as each chapter progresses. This is a valuable talent for any author of technical materials.       

The looseleaf format of ‘Taxation of Companies and Company Reconstructions’ means that the material is more likely to be up-to-date than an annual publication, with three updates a year. Regular updating is probably a more important feature of tax technical material than ever before, due to the frequency of changes in law and practice. This format also allows recent case law to be included. For example, I was impressed to find commentary on Swift v HMRC, a recent First-tier Tribunal case regarding the tax treatment of a Delaware LLC.

Overall, ‘Taxation of Companies and Company Reconstructions’ is a very high quality reference work. It is a ‘must have’ for company tax specialists. In addition, it will make a valuable addition to the tax library of professional firms that deal with Corporation Tax and reconstructions on a regular basis. I have no hesitation in recommending this valuable publication to both categories of tax adviser.

Mark McLaughlin CTA (Fellow) ATT TEP
Managing Editor, TaxationWeb
www.taxationweb.co.uk
October 2010

REVIEW

Taxation of Companies and Company Reconstructions
By Richard Bramwell, Michael Hardwick, Alun James & John Lindsay
Published by Sweet & Maxwell

Introduction

‘Taxation of Companies and Company Reconstructions’ is a book that I was very much looking forward to reviewing. I was not disappointed! The publication has a fairly long history, and seemingly a very good reputation amongst professionals. The first edition was published in 1973, and the current edition is the eighth. It is a very impressive looking publication consisting of two looseleaf binders, to which update releases are added. The list of authors and their credentials looks equally impressive. What about the contents?

Contents

The material is divided into five parts:

• Part A – General Principles
• Part B – Distributions
• Part C – Overseas Matters
• Part D – Groups
• Part E – Reconstructions

Each part is divided into chapters. Part A sets the scene with opening chapters on ‘The Scheme of Corporation Tax’ and ‘The Charge to Corporation Tax’. It also includes chapters ranging from ‘Compliance’ to ‘Ramsay as an Aid to Statutory Reconstruction’ and three chapters on the Intangible Fixed Assets regime. The book is written to a very high technical level, but in a style that is relatively easy to understand and digest. ‘Mainstream’ topics covered by the non-Corporation Tax specialist in everyday work (e.g., associated companies, and loans to close company participators) are included, although others (such as allowable trading deductions are not). However, Part A (and the publication as a whole) really caters for those dealing with wider and perhaps less common Corporation Tax issues.

Part B covers the taxation of distributions, and includes a chapter on ‘Companies Purchasing their Own Shares’. The purchase of own shares chapter is a relatively short one, but is nonetheless a useful exposition of the rules for capital distribution treatment, which includes a series of helpful examples dealing with the ‘substantial reduction’ and ‘connection’ tests.

The second looseleaf binder contains Part C, which includes chapters devoted to ‘Transfer Pricing’ and ‘Controlled Foreign Companies’. There is also a chapter dealing with company residence, including commentary on the recent case of Wood and another v Holden, which covers the High Court decision in that case (the next update will no doubt cover the Court of Appeal decision as well).  

Part D contains an overview of ‘Groups, Subsidiaries and Consortia’ and numerous worked examples in potentially difficult areas such as pre-entry losses and gains (a total of 35 examples in the chapter alone!). It also includes a chapter dealing with ‘Sales of Substantial Shareholdings’, which is relatively short but gives a very helpful overview of the relief and a few worked examples.

Part E contains an outline of Reconstruction Relief as an introduction to a more detailed explanation of the relief rules and conditions in TCGA 1992 ss 136, 139 and Sch 5AA. It also includes chapters on Stamp Duty and the TA 1988 s 703 anti-avoidance provisions on transactions in securities. The latter chapter considers the issue of when section 703 applies by breaking the legislation down into four questions, the answers to which will lead the reader towards ascertaining whether the anti-avoidance provisions apply to a particular situation. The Appendices contain material on ‘old’ rules concerning loan relationships, foreign currency and derivatives contracts (accounting periods beginning 1 January 2005, together with foreign exchange legislation and the taxation of financial instruments (accounting periods beginning before 1 October 2002).  

Cost

Taxation of Companies and Company Reconstructions costs £308 for the main publication, with the annual update service costing £235 (UK and Europe, or £245 for the rest of the World). This is a relatively high price for a tax book. However, it will undoubtedly seem like a worthwhile investment for most corporation tax practitioners.

The Verdict

In my view, Taxation of Companies and Company Reconstructions is an authoritative work on what is a wide ranging and potentially complex area. The authors are highly qualified – two barristers (one a silk), a solicitor who is a partner in a leading law firm, and a consultant who is a fellow of the Chartered Institute of Taxation. Enough said! The current edition of the book (the eighth) was first published in 2002 as a looseleaf, and has been regularly updated since. The fast-changing nature of tax legislation these days is such that a looseleaf service is suitable for such a publication.

For tax professionals who are involved in Corporation Tax work either full-time or on a regular basis, most will find Taxation of Companies and Company Reconstructions to be an important, if not essential, part of their tax library. This is not a book best suited to professionals occasionally involved in Corporation Tax work. However, professionals involved in such work to any significant extent will no doubt encounter difficult or unfamiliar technical issues on occasion. To that extent, they would probably derive considerable comfort from having this book available. It is difficult to find anything in the book to criticise. It is certainly a large and perhaps unwieldy tome, but that is really a consequence of the size and depth of the subject matter. As mentioned, a little more material of relevance to those dealing with the smaller, family or owner-managed company would increase the book’s appeal. 

In my view, the authors of Taxation of Companies and Company Reconstructions are to be complimented for an excellently written technical work, which must rank as a leading authority in its field.
 
Ordering Information

For ordering information about Taxation of Companies and Company Reconstructions, visit the Sweet and Maxwell website:
Taxation of Companies and Company Reconstructions

Mark McLaughlin CTA (Fellow) ATT TEP
TaxationWeb
June 2006

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