Present Position
The Insolvency Service has released statistics on the level of insolvencies in April 2020. This allows us to take a look at the immediate effect of insolvencies post-lockdown compared with those before.
Statistics
Recent regulatory developments of interest to all financial institutions. Includes key COVID-19 updates from the UK FCA, AML/CTF updates and more.
COVID-19: FCA statement on handling of post and paper documents
On 13 May 2020, the Financial Conduct Authority (FCA) published a statement on how firms should handle post and paper documents during the COVID-19 pandemic.
The Australian government has taken swift action to enact new legislation that significantly changes the insolvency laws relevant to all business as a result of the ongoing developments related to COVID-19.
The Coronavirus Economic Response Package Omnibus Act 2020 (Response Act) became effective on March 25, 2020, and is an effort to provide temporary relief to companies experiencing financial distress as a result of the ongoing and rapidly changing economic slowdown caused by COVID-19.
The COVID-19 Response Act
*Fried Frank published a memorandum titled COVID-19 Pandemic: Key UK Government and Bank of England Initiatives to Support Businesses on March 30, 2020 ("March 30 Memorandum") and published an update to the March 30 Memorandum on April 15, 2020 (the "April 15 Update"). In light of the rapidly developing situation and government response, the April 15 Update has been further updated to include the latest guidance provided by the UK Government, in particular as to employment retention initiatives and loan schemes, and is current as of May 12, 2020.
TABLE OF CONTENTS
COVID-19: Summary of Key Issues.................................................................................... 1
From 6 April 2020, all non-UK resident corporate landlords (NRLs) are within the charge to UK corporation tax on the income from their UK property rental business (PRB) and on capital gains from direct or indirect disposals of UK real estate. This marks a significant change for NRLs, which were previously subject to UK income tax on their PRB income and (until 6 April 2019) exempt from UK tax on their capital gains.
The English Court of Appeal has handed down its judgment in the Debenhams case, on which we acted. A copy of the judgment can be downloaded here. This upholds the decision of the High Court, which followed the earlier decision in Carluccio’s.
The emergence of COVID-19 (the Coronavirus) at the end of 2019 has had an unprecedented impact on the global economic system. This alert focuses on the effect the Coronavirus pandemic is likely to have on small and medium sized businesses (SMEs), their lenders in the UK and the options available to continue trading and avoid insolvency.