Tax in the Deal

There is a moment in every significant transaction when tax stops being a technical footnote and becomes a central part of the story. What strikes me most about the past twelve months is not only how resilient the M&A market has been in the face of global shocks, but also how creative it has become in identifying targets, bridging value gaps and re-grouping in uncertain trading conditions. This creative dealmaking brings new structures, new approaches to risk allocation, and new frontiers in acquiring and incentivising talent, building businesses across borders and raising finance in global markets. Amid all this innovation, however, the need to address tax risk proactively and robustly remains a constant.

It is with that observation in mind that I am delighted to launch our new publication - Tax in the Deal 2026 - an annual look at the trends, pressures, and practical realities shaping M&A tax in the United Kingdom (UK) and beyond.

The deal market has borne up well in the face of global shocks and appetite for M&A among investors and strategic buyers remains strong. Our Client and Deals snapshot captures the breadth and volume of work that we have been involved in this year. Our experience across those transactions enables us to anticipate and address the opportunities and risks and ensure that tax is never an afterthought.

The backdrop against which M&A activity is taking place has rarely been more turbulent from a policy perspective. Tax Policy Pulse 2026 takes stock of a year in which the UK, the EU, the OECD, and the UN, have each been pulling levers, sometimes in the same direction, sometimes emphatically not. Finance Act 2026 (FA 2026) alone brought material changes across a wide range of issues, including, taxing carried interest as income, overhaling rules governing permanent establishments and transfer pricing, repealing the diverted profits tax, and introducing new anti-avoidance measures on corporate reorganisation reliefs. Finance Act 2026: M&A Tax Highlights outlines the changes most likely to affect dealmakers and Tax on the Horizon looks ahead to the next items on the UK authorities' agenda. Our involvement in key technical committees and industry bodies allows us to inform and help shape that law and policy on behalf of our clients.

Alongside the pace of legislative change, structural forces are reshaping how tax work gets done. One such force is the adoption of artificial intelligence (AI). How AI is changing tax compliance, advisory practice and, critically, the enforcement and risk-assessment capabilities of HMRC is something no taxpayer can afford to ignore. AI in Tax examines what this means for clients facing increasingly data-driven regulatory scrutiny. The second is the continued globalisation of transactions, which makes international tax analysis a baseline expectation on most mid-market and large-cap deals.

Tax insurance has matured from a niche product into a mainstream deal tool, and our podcast interview with Dawn Bhoma, Founder and Principal at Icen Risk, explores M&A tax risk and where the insurance market is heading: what can be covered, what cannot, and how insurers are responding to the evolving landscape. This has also been a year in which risk associated with the tax treatment of transaction costs has been brought into sharp focus by the Hotel La Tour litigation, and the continued complexity around withholding taxes following the withdrawal of the UK's Double Taxation Treaty Passport (DTTP) concession has added meaningful friction and cost to certain cross-border structures: both are areas worthy of close attention on any transaction.

Transactional Tax Lessons from M&A Market Trends reflects on themes from this year's deal market: acquisitions of professional services businesses, corporate carve-outs, and the long-anticipated possible return of the IPO as an exit route. Our articles on cross-border management incentive plans (MIPs) and equity re-cuts address the continuing global appeal of equity incentive arrangements and the tax implications of re-incentivising management teams in a changed market. And for those navigating workforce structuring, our piece on off-payroll workers covers changes affecting personal service companies (PSCs) and umbrella companies and sets out the new joint and several liability rules introduced by FA 2026.

Finally, a word on earn-outs and deferred consideration. As deal pricing has become more contested, the structuring and tax treatment of consideration has become a point of real negotiation. It is a topic that deserves more attention and one we asses in Playing a Longer Game.

The deal market moves fast. Tax moves with it and so do we.

I hope you find the publication informative, stimulating and valuable.