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What is Tax Insurance?

A tax insurance policy will cover a specific potential tax liability. The issue may arise in a M&A or real estate transaction, or perhaps where there is some uncertainty in the tax treatment of a group reorganisation or restructuring.

We can provide bespoke policies to cover risks of up to £100m in return for the payment of a one-off premium. The policy will be designed to match the applicable statute of limitations for up to 10 years.

The policy can cover not just the tax itself, but also the costs of defending a claim from a tax authority and the risk of interest and penalties arising. Insurance can be provided for the gross-up of the proceeds of the policy if they are taxed in the hands of the insured.

Please note we will not insure abusive tax avoidance schemes.


Tax law is often unclear or open to differences of interpretation. Tax issues for businesses are in the spotlight globally as never before, capturing the attention of the boardroom, investors, the public and governments.

The need for tax certainty has never been greater. Certa provides a solution to this problem. A tax insurance policy provides the certainty that can prevent tax issues from derailing a deal process or delaying a group restructuring.

We take the risk so that you don’t have to.

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When can Tax Insurance be used?

Tax insurance is an extremely flexible tool and can be used to:

  • Facilitate transactions by removing contentious issues from the deal negotiations
  • Strengthen a bidder’s position by eliminating the need for a price chip or other contractual protection
  • Back an indemnity to provide a seller with a clean exit
  • Allow funds to be released from escrow
  • Address uncertainties arising on group reorganisations and restructures
  • Offers taxpayers a faster alternative to obtaining a tax authority ruling or clearance
  • Provide insolvency practitioners with the certainty they require to release funds
  • Permit real estate and private equity funds to return proceeds to their investors
  • Provide cover for potential historic exposures

Exploring tax insurance and
how it helps to drive deals