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Outline guide — UK sanctions, professional conduct and related considerations

Prepared by Svetlova LLP — 7 July 2026. This is a working outline, not a substitute for a full sanctions risk assessment or specific advice on any transaction. The regime changes frequently — always check OFSI/OTSI’s current guidance and the Consolidated List before acting.

1. The core distinction: sanctioned vs. merely Russian

The most common misconception is that all dealings involving Russia or Russian nationals are prohibited. They are not. UK sanctions law draws sharp distinctions between:

• Designated Persons (“DPs”): individuals and entities specifically named on the UK Sanctions List. An asset freeze applies — their funds and economic resources are frozen, and it is prohibited to make funds or economic resources available to them, directly or indirectly (Regulation 11 and 17A, Russia (Sanctions) (EU Exit) Regulations 2019, “the Russia Regulations”).
• Persons connected with Russia: a much broader category (Regulation 21) — essentially anyone ordinarily resident or located in Russia, and any entity incorporated or domiciled there (including a Russian subsidiary of a UK company). This category is not subject to an asset freeze, but is the trigger for the professional and business services ban (Regulation 54C) and related restrictions.
• Everyone else — a Russian national who is neither a DP nor connected with Russia (e.g. resident and ordinarily based outside Russia) is not, by virtue of nationality alone, subject to sanctions restrictions. Nationality/ethnicity is not itself a basis for refusing to act — doing so risks unlawful discrimination under the Equality Act 2010 (see XTX Markets Technologies Ltd v Mazars LLP [2025], concerning de-banking of non-sanctioned individuals).

Always check the actual and current UK Sanctions List (the single official list, OFSI’s Consolidated List having been folded into it) before assuming anything about a client or counterparty’s status.

2. What is absolutely prohibited (asset freeze — Designated Persons)

• Making funds or economic resources available, directly or indirectly, to or for the benefit of a DP (Regulation 11/17A).
• This is strict liability civilly — OFSI can impose a monetary penalty even without knowledge, though actual/constructive knowledge and the standard expected of a regulated professional are aggravating or mitigating factors.
• Criminal liability attaches where there is knowledge or reasonable cause to suspect a breach.
• “Economic resources” is interpreted broadly — it can include intangible assets and services, not just cash (OFSI has taken enforcement action on this basis).
• A UK legal firm can act for a DP and be paid, but only within the terms of OFSI’s Legal Services General Licence (currently INT/2026/9512597, effective 29 April 2026 to 28 October 2026 — check for a successor licence if outside that window), which caps hourly rates and fee levels and requires reporting to OFSI.

3. Professional and business services ban (Regulation 54C)

Since 21 July 2022 (extended through 2022), it has been prohibited to provide, directly or indirectly, the following services to a person connected with Russia: accounting, advertising, architectural, auditing, business and management consulting, construction, engineering, IT consultancy and design, and public relations services (Schedule 3J).

Legal advisory services are not included in this list — they are governed by a separate, narrower regime (Regulation 54D, below). This is a frequent point of confusion.

Limited exceptions exist, including services provided to discharge a UK statutory/regulatory obligation not arising under contract, and certain pre-existing contracts (time-limited wind-down provisions, now expired for most categories).

4. The specific legal advisory services restriction (Regulation 54D)

Since 30 June 2023 (amended 6 September 2024), it is prohibited for a UK person, anywhere in the world, to provide legal advisory services to a non-UK person where the UK person knows the object or effect of the services is to enable or facilitate activity that would be prohibited under the Russia Regulations if it had the necessary UK links.

4.1 What counts as “legal advisory services” for this restriction

• Non-contentious advice on the application or interpretation of law.
• Acting on behalf of a client, or advising, in connection with a commercial transaction, negotiation, or other third-party dealing.
• Preparation, execution or verification of legal documents.

4.2 What is expressly carved out — and remains lawful

• Litigation and arbitration: representation or advice in proceedings before courts, arbitral tribunals or administrative agencies in any jurisdiction is not “legal advisory services” for these purposes. Acting for a Russian party (or a party connected with Russia) in contentious proceedings is not, of itself, restricted by Regulation 54D.
• Sanctions and compliance advice — advising on the Russia Regulations, other UK or non-UK sanctions, Russian counter-sanctions, or other criminal/compliance legislation (Regulation 60DB).
• Diplomatic/consular matters.
• (Re)insurance claims management.

The 2024 amendment added a knowledge requirement — the offence now requires the adviser to know the object or effect is to enable/facilitate prohibited activity, narrowing the earlier, broader “in relation to or in connection with” formulation.

5. Circumvention and facilitation (Regulations 19 and 55)

Separately from 54C/54D, it is an offence to intentionally participate in activities knowing their object or effect is, directly or indirectly, to circumvent any prohibition in the Russia Regulations, or to enable/facilitate a contravention. This is a general anti-avoidance provision that can catch legal (and other) services even outside the specific 54C/54D categories, if the underlying transaction being assisted is itself prohibited.

6. Worked example: can a UK company sell shares in its Russian subsidiary at nominal value simply to exit?

In principle, yes — exiting Russia (as opposed to investing into Russia) is generally the direction sanctions law does not restrict. But “nominal value, no sanctions involved” requires unpacking across several distinct checks, not one:

6.1 Check the counterparty

• Is the buyer, or anyone who ultimately owns or controls the buyer, a Designated Person? If so, selling an asset at an undervalue is capable of being characterised as making an economic resource available to that DP (i.e. the value transferred exceeds the price paid) — squarely within the asset freeze prohibition, regardless of how the transaction is documented.
• This is the single most important check, and the one most often missed in a rushed exit — ownership and control structures in Russia are frequently opaque, and the Court of Appeal’s decision in NBT v Mints [2023] EWCA Civ 1132 confirms that “control” for sanctions purposes can be found on a fact-specific basis even absent formal majority ownership.

6.2 Check Regulation 20 (dealing in transferable securities/money-market instruments)

• Regulation 20 restricts dealing in transferable securities and money-market instruments issued by, or on behalf of, certain Russian persons/entities, but this is principally targeted at capital markets instruments (bonds, listed securities) issued after specified dates, and at the Russian state and major state-linked entities — it is not a general prohibition on selling shares in an ordinary private Russian subsidiary. It should nonetheless be checked against the specific entity and instrument in question before assuming it is out of scope.

6.3 Check for circumvention/facilitation

• If the nominal-value structure exists to disguise value passing to a DP, or to achieve indirectly what regulation 17A/11 would prohibit directly, this is a circumvention risk under Regulation 19/55 — independent of Regulation 20.

6.4 Russian counter-sanctions — a separate, non-UK regime that will govern the deal mechanics

• Presidential Decree No. 618 (and related Russian domestic legislation) imposes its own requirements on the Russian side for a divestment by a person from an “unfriendly” state: mandatory approval of a Russian Government Commission, a mandatory minimum discount to market value (historically around 50%, subject to change), and often an “exit contribution” payment to the Russian federal budget calculated as a percentage of the transaction value.
• This is Russian law, not a UK sanctions constraint — but it directly shapes why a nominal or heavily discounted price might be commercially unavoidable, and needs to be factored into the UK-side analysis (including on valuation and tax, below) rather than treated as a red flag in isolation.

6.5 UK company law and tax consequences (not sanctions, but frequently overlooked)

• Selling a company asset for nominal value engages ordinary UK director’s duties — principally the duty to promote the success of the company (Companies Act 2006, s.172) and to exercise reasonable care and skill (s.174). Directors should document the commercial rationale (including the Russian counter-sanctions constraints above) to justify why nominal consideration was the best reasonably available outcome, to protect against a future minority shareholder or liquidator challenge.
• For UK tax purposes, a disposal to a connected party is generally treated as being at market value regardless of the price actually paid (TCGA 1992, s.18/s.17, and equivalent corporation tax principles) — a nominal sale price does not achieve a nominal tax base cost or avoid a deemed market value gain/loss calculation. Specialist tax advice should run in parallel.

6.6 Practical conclusion on the example

A UK company can lawfully sell shares in a non-sanctioned Russian subsidiary, including at nominal value, without breaching UK sanctions, provided: the buyer is not a DP and not owned/controlled by one; the shares/instrument are not caught by Regulation 20; the structure is not designed to circumvent any prohibition; and the firm advising is not thereby providing prohibited legal advisory services to a non-UK person in relation to other restricted activity. The transaction will separately need to satisfy Russian counter-sanctions requirements (Decree 618 and related legislation) on the Russian side, and UK director’s duties and tax analysis on the UK side — none of which are “sanctions” issues but all of which will drive the real structure and price of the deal.

7. SRA / professional conduct obligations

• Firms must conduct a sanctions risk assessment for relevant clients and matters, and are expected to apply risk-based due diligence proportionate to their exposure (SRA guidance, drawing on OFSI’s risk indicators).
• The SRA has published “red flags” for attempted circumvention — e.g. unusual corporate structures, reluctance to disclose beneficial ownership, last-minute changes to payee details, and transactions that make commercial sense only if a sanctions prohibition is being avoided.
• Firms holding funds connected to designated persons, or who know/suspect a breach, are subject to reporting obligations to OFSI (and, where relevant, the NCA under POCA/AML legislation) — this can override the normal duty of confidentiality.
• Client and other professional privilege is not overridden by sanctions reporting obligations in the same way as under POCA disclosure requirements — the two regimes should be considered separately and carefully for any given piece of information.

8. Quick reference — what is and isn’t restricted

• Acting for a non-designated Russian national resident outside Russia: generally unrestricted (subject to ordinary conduct/AML checks).
• Litigation/arbitration for a Russian party or entity: not restricted by 54D, even where the counterparty or matter has Russian connections — always check the client/counterparty is not a DP for other reasons (asset freeze, payment mechanics).
• Non-contentious commercial/transactional advice to a person connected with Russia, on activity that would itself be prohibited if UK-linked: restricted under 54D.
• Advice on sanctions compliance itself, to anyone: permitted (Regulation 60DB).
• Receiving fees from a Designated Person: only within the current OFSI Legal Services General Licence.
• Selling/exiting non-sanctioned Russian assets: generally permitted, subject to the counterparty, securities-dealing, and circumvention checks set out in Section 6.
• New investment into Russia, or dealing in newly issued Russian securities: separately and more heavily restricted — not covered in detail in this note; take specific advice.

9. Sources and further reading

• Russia (Sanctions) (EU Exit) Regulations 2019, as amended — in particular Regulations 11, 17A, 19–21, 54C, 54D, 55, 60DB, and Schedule 3J.
• OFSI, “Russia sanctions: statutory guidance” (gov.uk, last updated 20 May 2026).
• OFSI/DBT, “Complying with professional and business services sanctions related to Russia” (gov.uk).
• SRA, “Sanctions: Legal services” guidance (sra.org.uk).
• NBT v Mints [2023] EWCA Civ 1132 (ownership and control test).
• Current OFSI Legal Services General Licence — check gov.uk/government/publications/legal-services-general-licence for the version currently in force.

This note reflects the position as understood as at 7 July 2026. The Russia sanctions regime changes frequently (OFSI reported 240 active enforcement investigations as at April 2025, and continues to issue and amend general licences on a rolling basis) — always verify the current position before relying on any point above in a live transaction.

Automatic renewal clauses—commonly referred to as “evergreen clauses”—are widely used in contracts for services, subscriptions, and commercial leases. These clauses automatically renew a contract unless the customer provides written notice of cancellation within a specific period—often 60 to 90 days before expiry. While such clauses are legally permitted, their enforceability is increasingly being challenged under UK contract law and regulatory guidance when they are applied unfairly, without transparency, or without reasonable opportunity for customers to cancel. This article explores the legal and regulatory context surrounding these clauses and provides real-world examples involving LexisNexis and Regus.

The Legal and Regulatory Framework in the UK

Under the Consumer Rights Act 2015 and the Unfair Contract Terms Act 1977, contract terms must be fair, transparent, and not cause a significant imbalance in the rights and obligations of the parties. While these laws apply primarily to consumer contracts, they influence the treatment of small business contracts—especially where there is an imbalance in bargaining power.

The Competition and Markets Authority (CMA) has issued guidance that automatic renewal clauses may be unfair if:
– Customers are not clearly informed of the renewal process.
– The cancellation window is unduly long or unreasonable.
– The customer does not receive a timely reminder before renewal.

CMA Enforcement and Supporting Case Law

In recent years, the CMA has taken enforcement action against companies such as Norton and McAfee for unfair auto-renewal practices. These companies were required to provide clearer cancellation options and refund mechanisms. This regulatory pressure reflects growing concern about the impact of these clauses on both consumers and small businesses.

Legal precedent also supports the argument that such clauses may be unenforceable. In Cavendish Square Holding BV v Makdessi [2015] UKSC 67, the Supreme Court held that contractual penalties must be proportionate to the legitimate interests of the party relying on them. This case is especially relevant where a service provider seeks to enforce an entire year’s fee for a minor technical non-compliance with a notice deadline.

The LexisNexis Case: A Disputed Renewal Based on a 10-Day Shortfall

In 2022, a London law firm, a small UK law firm, entered into a two-year subscription with LexisNexis for legal research services. The agreement contained a clause requiring cancellation no later than 90 days before the contract’s expiration. The firm gave notice 80 days prior—only 10 days short of the required notice period.

Despite this, LexisNexis refused to cancel the renewal and demanded payment of over £3,000 for the new annual term. No reminder of the approaching cancellation deadline was issued, nor was the clause highlighted during onboarding. This enforcement of a strict technicality has been challenged as unfair and disproportionate under UK contract principles and CMA guidance.

The Regus Example: Automatic Renewals in Office Leases

Similar issues have arisen with Regus, the global serviced office provider. Regus contracts often include automatic renewal clauses with 90-day cancellation periods. Customers have complained that cancellation notices sent even a few days late have resulted in enforced annual renewals and aggressive collection efforts. These terms are rarely emphasised at the time of signing, and reminder notices are not consistently issued.

In some instances, small firms have alleged that Regus failed to process cancellation requests correctly or failed to acknowledge written notices. This has triggered complaints to trading standards and legal challenges on the grounds that the renewal terms are unfair, not transparent, and commercially unreasonable.

Legal Analysis: When Are Automatic Renewal Clauses Unfair?

Based on CMA guidance and UK case law, automatic renewal clauses may be unenforceable when they:
– Are not clearly disclosed or explained at the time of contract.
– Require unreasonably early notice (e.g., 90 days for a 12-month contract).
– Are enforced without a reminder being sent to the customer.
– Result in substantial financial penalties for minor or technical failures.

In both the LexisNexis and Regus examples, customers acted in good faith and gave substantial notice.
The rigid enforcement of these clauses, without reminders or grace periods, creates an unfair imbalance and may be legally challenged.

Conclusion: Pushback Against Unfair Practices

The UK legal landscape offers growing support for those challenging automatic renewal clauses. Regulatory action by the CMA and Supreme Court rulings reinforce the need for fairness, proportionality, and transparency. Businesses relying on rigid or unfair renewal clauses risk not only reputational damage but also legal defeat.

Customers—including small firms—should feel empowered to dispute auto-renewals that result in disproportionate loss or were not clearly explained. Legal advice, formal complaints, and regulatory escalation remain powerful tools against such practices.

UK law imposes no legal restrictions on non‑UK citizens purchasing residential property. However, foreign buyers must manage tighter regulatory, financial, and tax-related requirements than UK residents.

Legal and Regulatory Requirements

• While not a legal requirement, retaining a solicitor or licensed conveyancer is essential—particularly for foreign purchasers. They conduct searches, review title, draft contracts, verify property legality, and manage international funds transfers.
• Anti‑Money Laundering (AML) regulations require proof of identity (e.g. passport) and overseas address, plus detailed source‑of‑funds documentation (e.g. bank statements, tax returns or sale receipts).

Mortgage Financing for Foreign Buyers

• Mortgages are available to foreign nationals, but lenders typically require:
  • A higher deposit (often 20%–40%)
  • Evidence of stable employment or sufficient income
  • UK or international credit history, in some cases
  • A relatively long visa/residency tenure (e.g. at least 1‑year remaining).
• Using a specialist mortgage broker is strongly recommended to navigate lender restrictions and source products suited to overseas clients.

Stamp Duty & Tax Implications

Stamp Duty Land Tax (SDLT)

• Non‑UK residents must pay an extra 2% SDLT surcharge, in addition to normal SDLT bands (0–12%).
• If you already own a home abroad, a further additional surcharge (now 5%) may apply.

Income Tax (Rental Income)

• Renting your UK property triggers UK income tax obligations under the Non-Resident Landlord Scheme, regardless of your residence status.

Capital Gains Tax (CGT)

• Gains on the sale of a UK residential property are taxable. Non-resident CGT rates can range up to 28%, depending on gain and tax status.

Inheritance Tax (IHT)

• UK property owned by foreign nationals is subject to UK inheritance tax, potentially at rates up to 40%, and is liability‑triggering regardless of where you reside.

Typical Costs & Fees

Foreign buyers should budget for:

• Conveyancing fees: £600–2,400 (often higher for international cases)
• Survey and valuation costs: £250–1,500 depending on property value and type.
• Mortgage arrangement & valuation fees, if borrowing: £995–2,000 + valuation costs.
• Exchange costs when transferring foreign currency—typically 1–3% of the transaction amount.

Ownership Structures & Planning

• Purchases can be made individually, jointly, or via corporate entities.
• Companies face different tax rates: for instance, SDLT up to 17% for non-resident companies owning residential property over £500,000, plus ongoing corporation tax, ATED, and register of overseas entities obligations.

Practical Considerations

• Visa validity matters: lenders may decline applications if your UK visa expires within 12 months—or you lack sufficient UK residency history.
• Gifted funds: cash gifts for purchase are allowed, though solicitors will require AML documentation; the funds may need to be in UK bank for a certain period before completion.
• Property management: Non‑residents often appoint a UK‑based manager to handle tenants, compliance, tax filings, and maintenance.

Why Choose Svetlova LLP

Our experienced international and property law team offers:

• Tailored end‑to‑end support from funds verification and AML compliance through to completion and registration.
• Co‑ordinated advice on tax structuring, mortgage strategy, and inheritance/investment planning.
• Liaison with global clients, brokers, estate agents, and financial institutions to ensure a seamless transaction.

Key Checklist for Foreign Buyers

Buying residential property in the UK as a foreign national is entirely feasible—but requires expert legal guidance to navigate complex tax and regulatory hurdles. Stamp duty surcharges, AML checks, mortgage eligibility constraints, and tax obligations demand early coordination and careful planning.

At Svetlova LLP, our cross-border team is on hand to provide dedicated legal advice and deliver a smooth, compliant, and successful property acquisition.

In July 2025, England is poised to enact the landmark Renters’ Rights Bill, a sweeping overhaul of private residential tenancies that significantly recalibrates the balance between landlords and tenants. While tenants gain greater security and rights, landlords must adapt to new legal standards and stricter enforcement measures. This article breaks down the Bill’s key provisions and what they mean for landlords operating in England.

Mandatory Written Tenancy Terms

• Legal requirement: All landlords must provide tenants with a written “statement of terms” before the tenancy begins.
• Required content: The statement will include specific mandatory information and future regulations may prescribe standard tenancy clauses.

Abolition of Fixed-Term ASTs & Section 21 Evictions

• Fixed-term assured shorthold tenancies (ASTs) will be abolished. All tenancies become periodic, effectively rolling tenancies.
• Section 21 (no-fault eviction) notices will be eliminated. Landlords can only regain possession under defined Section 8 grounds.
• These changes apply immediately upon Royal Assent to all existing and new tenancies.

Expanded Grounds for Possession

• Grounds increased: The Bill outlines up to 36 grounds for possession (25 mandatory, 11 discretionary), replacing the previous 17 under ASTs.
• Notice requirements:
  • Selling or moving in? Requires 4 months’ notice, with protections in a tenant’s first year.
  • Non-payment or lease breaches follow updated Section 8 provisions.

Rent Increases & “Bidding Wars” Banned

• Periodic rent reviews only: Landlords may increase rent once per year via a Section 13 notice, with no automatic or contractually pre-defined increases allowed.
• Market-based only: Rents must reflect market rates. Tenants can appeal to the First-Tier Tribunal without risk of back-dating or supra-requested increases.
• No more bidding wars: Higher bids over the advertised rent are prohibited—any such solicitations void and unenforceable.

Stronger Property Standards & Tenant Health

• Awaab’s Law (fixing hazards like damp and mould promptly) now applies to the private rented sector.
• Decent Homes Standard extended: landlords must meet defined minimum quality standards.

Landlord Registration & Ombudsman

• Private Rented Sector Database: All landlords must be registered.
• Mandatory Ombudsman: A dedicated, binding disputes service. Failure to join may result in local authority penalties of £7,000–£40,000 or criminal prosecution. Rent repayment orders may be issued against non-compliant landlords.

Enhanced Penalties & Rent Repayment Orders

• Civil fines raised: Up to £40,000 for serious breaches; landlords can be fined up to £7,000 per hazard issuance by councils.
• Rent Repayment Orders (RROs) extended throughout rental chains and can exceed previous caps, particularly for repeat offenders.

Implications for Landlords

1. Administration and Compliance
   • Review and update tenancy documentation to include mandated terms.
   • Implement robust tenant referencing, credit checks, and evidence-based record-keeping for Section 8-related evictions (totallandlordinsurance.co.uk, totallandlordinsurance.co.uk).
2. Financial Planning
   • With potential court delays and one-year rent cycle limits, landlords should recalibrate investment and cash flow strategies .
3. Property Maintenance
   • Be proactive in addressing hazards—especially mould and damp—to avoid hefty fines and tenant claims .
4. Dispute Resolution
   • Join the Ombudsman, and prepare for a more formal complaints process. Document all communications.
5. Market Dynamics
   • Some landlords may exit the market, potentially reducing supply and increasing rents. Others might shift to long-term or corporate lettings .

Legal Insight from Svetlova LLP

At Svetlova LLP, we believe regulation should ensure fairness without undermining viability. The Renters’ Rights Bill presents a significant shift, and commercial landlords must respond proactively:

- Draft and implement compliant tenancy agreements.
- Strengthen tenant screening and dispute documentation.
- Upgrade property quality to meet new standards.
- Ensure full registration and ombudsman compliance.

Our experienced legal team can assist with:

• Drafting and reviewing updated tenancy documents
• Strategic planning for landlord compliance
• Case management under Section 8 and Section 13 procedures
• Ombudsman and tribunal representation

Let us help you stay ahead of these reforms—secure your investments while navigating this new rental landscape.

A new legal proposal published by the UK Law Commission could mark one of the most significant transformations in company law in recent years. The suggested reform aims to bring greater clarity and accountability to the way company directors consider the broader impact of their decisions—beyond just shareholder profits. At Svetlova LLP, we’re following these developments closely, as the implications for corporate governance and compliance could be far-reaching.

The Core Proposal: Reframing Directors’ Duties

Under current UK law, directors are required to promote the success of the company “for the benefit of its members as a whole,” while also having regard to other factors such as employees, the environment, and suppliers. This is codified in Section 172 of the Companies Act 2006.

The Law Commission is now proposing a change that would clarify—and arguably elevate—the importance of these “stakeholder” interests. While it stops short of suggesting a radical shift to a stakeholder primacy model (where directors must balance all interests equally), it does recommend making stakeholder considerations more explicit and meaningful in corporate decision-making.

Why Now?

The move comes amid increasing public and regulatory pressure for businesses to demonstrate environmental, social, and governance (ESG) responsibility. From climate risk to labour practices, companies are expected to be more transparent about how they impact society and the planet.

A growing chorus of voices—including investors, regulators, and NGOs—are calling for corporate decision-making to reflect broader societal values. The Law Commission’s proposal responds to this momentum, aiming to reduce ambiguity and ensure directors understand and fulfil their responsibilities in a way that aligns with evolving expectations.

What Could This Mean for Your Business?

If adopted, these reforms would not impose an entirely new duty on directors but could:

• Clarify the weight that should be given to stakeholder interests in key decisions
• Lead to greater scrutiny of board-level choices
• Encourage more comprehensive reporting on ESG factors
• Potentially shift the culture of corporate governance toward more inclusive practices

For many companies, especially SMEs, these changes could feel like an added layer of complexity. However, they also present an opportunity to future-proof your governance practices and demonstrate genuine commitment to sustainability and stakeholder engagement.

How Svetlova LLP Can Help

Whether you’re a business owner, director, or investor, understanding the potential impact of these reforms is critical. At Svetlova LLP, we offer bespoke legal advice on corporate governance, directors’ duties, and compliance matters.

Our team can help you:

• Interpret how the proposed changes may affect your obligations
• Review your current corporate governance framework
• Develop ESG strategies that align with legal and stakeholder expectations
• Provide training for directors and senior management

As this proposal moves through the consultation and legislative process, we will continue to monitor developments and update our clients accordingly.

Stay Ahead of the Curve

This is a pivotal moment in the evolution of UK company law. By engaging with these changes proactively, companies can not only mitigate risk but also position themselves as leaders in responsible business.

When preserving family wealth and ensuring smooth intergenerational transfer are priorities, a Family Investment Company (FIC) can offer significant benefits. A Family Investment Company is a private limited company created specifically to hold and manage investments for a family. It is increasingly becoming a preferred alternative to trusts—especially since the 2006 reforms that brought all lifetime gifts into trusts under inheritance tax rules, subject to a 20% charge on any value above the nil‑rate band.

What Is a Family Investment Company?

A FIC is essentially a UK company (though offshore entities with UK directors are an option) formed under the Companies Act. It can issue different share classes to separate control (voting rights, often held by parents) from economic interest (dividends or capital, often held by children), enabling sophisticated long‑term wealth transfer planning .

Why Use a FIC?

1. Inheritance Tax (IHT) Efficiency
   Gifts of shares to children are treated as potentially exempt transfers (PETs), falling outside the donor’s estate after seven years—unlike transfers into trusts, which often trigger an immediate 20% IHT charge.

2. Lower Corporate Tax Rates
   FICs pay corporation tax at 25%, which is often lower than top personal income tax rates (45–48%). Corporate‑level income and gains are frequently more tax‑efficient, and the company can deduct interest and management expenses.

3. Capital Gains and Interest Relief
   While capital gains are taxed at 25%, the company can often benefit from exemptions—like the Substantial Shareholdings Exemption—and deduction of interest on investment loans.

4. Long‑Term Growth Focus
   The structure encourages accumulation and reinvestment of wealth across generations rather than immediate extraction, aligning with multi‑generational planning goals .

Structuring a FIC

• Type and Location: Most UK families choose a UK limited company, though offshore incorporation with UK residency is possible, depending on domicile and mobility .

• Share Classes: Structure voting and economic shares to maintain control while passing financial value.

• Loans vs Shares: Parents can lend funds as well as subscribe for shares, offering flexible mechanisms for both entering and exiting capital.

When a FIC May Not Be Right

• Property Ownership: Residential UK property held inside a company may incur Annual Tax on Enveloped Dwellings (ATED).

• Loss of Personal Tax Breaks: FICs cannot access personal reliefs like Business Asset Disposal Relief or EIS.

• Cost Considerations: Incorporation and annual compliance costs mean FICs are usually best suited to substantial portfolios—Saffery suggests a minimum of £5m in investable assets.

• Regulatory Uncertainty: Although FICs remain effective under current UK law, future HMRC policy changes or anti‑avoidance scrutiny could impact their attractiveness .

Alternatives and Complementary Structures

FICs can be used alongside other intergenerational structures depending on financial goals and family situations:

• Private Trust Companies (PTCs) – where the PTC acts as trustee, offering control and governance continuity.

• Family Foundations and Protected Cell Companies (PCCs) – offer privacy, asset segregation, or jurisdiction-specific advantages.

• Limited Partnerships – useful for passive, capital-backed structures, particularly in private equity settings.

Conclusion: Is a FIC Right for You?

A Family Investment Company can be a powerful solution when:

• Long-term capital growth is the priority.

• Control and wealth succession are carefully balanced.

• Tax efficiency is sought within a corporate model.

• Substantial assets justify setup and administration costs.

However, FICs aren’t one-size-fits-all. Families with smaller portfolios, reliance on individual tax reliefs, or whose assets include residential property may find alternative vehicles more suitable.

At Svetlova LLP, we understand that navigating corporate, personal, and inheritance tax matters is complex. We offer dedicated expertise to:

• Design the optimal governance and share structure.

• Model tax-efficient returns across scenarios.

• Coordinate FICs with complementary trust, partnership, or foundation structures.

• Monitor legislative and HMRC developments.

Get in Touch
If you’re exploring whether a Family Investment Company is right for you and your family, our experts can guide you through setup, compliance, and succession planning—securing your legacy for generations to come.

Why Are There Delays at the Land Registry?

Several factors have contributed to the current backlog at HM Land Registry:

• Increased Volume of Transactions: The Stamp Duty Land Tax holiday introduced during the COVID-19 pandemic led to a surge in property transactions, overwhelming the system.
• Staffing Challenges: The pandemic also brought about staffing shortages and a shift to remote working, which affected processing times.
• Complex Applications: Applications involving new leases, subdivisions, or first-time registrations are particularly time-consuming and have added to the backlog.

Current Processing Times

As of May 2024, HM Land Registry processes approximately 2.4 million applications monthly. While 83.1% of these are completed within a day, more complex applications, such as those updating title registers, are experiencing significant delays. Notably, 36.8% of these take longer than a month to process. In some cases, first-time registrations or new lease applications have taken over 15 months to complete.

Implications of Delays

Delays in registration can have several consequences:

• Financial Strain: Homeowners may face increased mortgage payments or miss out on favourable refinancing options due to unregistered changes.
• Transaction Complications: Pending registrations can hinder the sale or purchase of properties, leading to potential deal collapses.
• Legal Uncertainties: Until registration is complete, legal ownership may remain unclear, posing risks in property disputes.

Expediting Applications

In certain situations, it’s possible to request expedited processing:

• Criteria for Expedited Service: If a delay is causing significant hardship or jeopardizing a property transaction, an expedite request can be submitted.
• Supporting Evidence: Documentation such as a memorandum of sale, mortgage offer, or evidence of financial hardship can support the request.
• Processing Time: Approved expedited applications are typically processed within 10 working days.

Moving Forward

While HM Land Registry is taking steps to address the backlog, including hiring additional staff and implementing digital solutions, it’s essential for individuals involved in property transactions to be proactive:

• Stay Informed: Regularly check the status of your application and maintain open communication with your solicitor.
• Plan Accordingly: Anticipate potential delays in your transaction timeline and make necessary arrangements.
• Seek Professional Advice: Consult with your solicitor to understand your options and rights during this period.

Artificial intelligence (AI) is rapidly transforming how businesses operate—automating processes, generating content, analysing data, and even making decisions. But as the use of AI increases, so too does the need for legal and ethical oversight.

Whether you’re building AI tools in-house, purchasing off-the-shelf models, or integrating AI into customer services, it is essential to understand the key legal risks and responsibilities that come with it.

1. Data Protection and Privacy

AI systems often rely on large datasets, which may include personal or sensitive information. Under UK GDPR and the Data Protection Act 2018, organisations must ensure a lawful basis for data processing, conduct Data Protection Impact Assessments (DPIAs) where automated decisions are made, be transparent with users about how data is used and for what purposes, and secure data against breaches, particularly when training models.

Using third-party AI tools also requires careful vetting of the provider’s data handling practices.

2. Intellectual Property Rights

AI raises complex questions around ownership like: Who owns AI-generated content or inventions? Is it legal to train an AI model using copyrighted material? What rights do businesses have over datasets or model outputs?

Businesses must ensure clear contractual provisions on IP ownership, particularly when outsourcing development or using cloud-based platforms.

3. Accuracy and Accountability

AI outputs are only as reliable as their training data and algorithms. This presents potential risks like inaccurate outcomes (e.g., in finance, HR or legal decisions), bias in automated decisions, and difficulty in explaining or justifying decisions made by opaque models

Firms using AI should implement testing, oversight, and quality assurance procedures to minimise risk—especially where decisions impact individuals’ rights.

4. Ethical Use and Reputational Risk

There is growing public and regulatory scrutiny over how AI is used. Ethical issues include discrimination or bias in recruitment, credit, or profiling systems, use of AI in surveillance or behavioural analytics, transparency and user consent.

Organisations should adopt ethical guidelines and consider independent audits or impact assessments, particularly when deploying AI at scale.

AI offers extraordinary opportunities—but also significant legal and ethical responsibilities. Businesses must approach adoption carefully, embedding compliance, transparency, and good governance into their AI strategy.

If your organisation is considering using AI—or already has—we can help you navigate the legal landscape. Contact us to discuss how to implement AI safely, lawfully, and with confidence.

The UK Government has introduced a sweeping set of immigration reforms aimed at reducing overall migration levels. These changes, announced by the Home Secretary and now confirmed through updates to the Immigration Rules, mark one of the most significant shifts in policy in recent years. The revised rules are expected to take effect in stages throughout the first half of 2024.

Key Updates to the Skilled Worker Route

One of the most impactful changes affects the Skilled Worker visa route. From 4 April 2024, the minimum general salary threshold for new Skilled Worker applicants will rise sharply from £26,200 to £38,700 per year. This increase is intended to encourage employers to prioritise the domestic workforce.

However, exemptions will apply in specific circumstances:

• Health and Care Workers, including those in nursing, senior care, and certain medical roles, will continue to benefit from lower thresholds.

• Applicants under the Shortage Occupation List (soon to be replaced by the new Immigration Salary List) may also be eligible for reduced salary requirements, albeit with tighter restrictions.

Existing Skilled Worker visa holders renewing their status will not be subject to the new salary threshold if they remain in the same role and employer.

Dependants Face New Restrictions

From 11 March 2024, overseas care workers and senior care workers will no longer be able to bring dependants (partners or children) to the UK. This significant policy shift is aimed at reducing the number of people entering the UK via the health and social care route. Employers in the sector are advised to review their recruitment strategies accordingly.

Family Visa Thresholds Increasing

The Government also plans to raise the minimum income requirement for family visas (for example, spouse or partner visas) in stages:

• From 11 April 2024, the minimum income threshold will rise from £18,600 to £29,000.

• Further increases to £34,500 and then £38,700 are expected later in 2024 or early 2025, though specific timelines have not yet been confirmed.

This phased approach is intended to ease the transition while aligning the family visa system more closely with the Skilled Worker thresholds.

Abolition of the Shortage Occupation List

In line with recommendations from the Migration Advisory Committee (MAC), the Shortage Occupation List will be replaced by a new Immigration Salary List. This update, taking effect from 4 April 2024, will remove the previous 20% salary discount available for shortage roles. The MAC has also advised reducing the number of eligible job roles on the new list, signalling a stricter approach to labour shortages.

Other Notable Changes

• The graduate visa route is under review, with a MAC report expected by May 2024. This could potentially affect the rights of international students post-study.

• Reforms to the Visitor visa rules will now allow visitors to engage in a broader range of work-related activities, such as attending internal meetings or delivering training.

These wide-ranging reforms signal a clear shift in the UK’s immigration priorities, with a focus on reducing numbers while preserving access for high-skilled talent. Employers, particularly in the health, care, and hospitality sectors, should take immediate steps to assess how these changes will affect recruitment and sponsorship planning.