Insights

Following the 2013 G8 summit in June, the Government has unveiled plans to introduce transparency to company ownership. A consultation is currently underway and it is likely that legislation will be introduced in the next Finance Bill.

It is intended that a central register will be created on which all companies will be required to provide full details of their shareholders. For the majority of companies this is already the case, however there are company shareholders who prefer to remain anonymous; perhaps for commercial reasons, or because there are offshore trusts in place, and European Governments perceive that enabling these shareholders to remain anonymous assists criminal activity. They are therefore of the view that introducing transparency will ‘promote an international tax system that is fairer to all and will fight the global problems of tax evasion, tax avoidance and illicit finance in the developed and developing world.’

When the central register is officially introduced, all companies will be legally obliged to provide information detailing who ultimately owns and controls them. This information will be stored in a central register maintained by Companies House and will be made available to law enforcement agencies and tax authorities. In addition to bringing these rules into force in the UK, the UK Government has secured agreements from related overseas jurisdictions to publish similar registers; this includes British Overseas Territories and Crown Dependencies

The Government says the register is being introduced to provide greater clarity to official agencies about who really owns controls and benefits from companies. It is intended to counteract money laundering, tax evasion and avoidance, the financing of terrorism, bribery, the ability to hide stolen assets and evade financial sanctions.

In an interview just before the G8 Summit, George Osborne said, “a company should know who ultimately owns or controls it - its beneficial owners - and it is essential that law enforcement and tax authorities have access to that information. These commitments demonstrate the concrete action we are taking ourselves but it is vital that we take collective international action through the G8 to tackle the international challenges of tax evasion, money laundering and illicit finance.”

Whilst currently it is intended that this full information will be available only to official agencies, consultation is underway to decide whether the information should be freely available to all.

For more information on the forthcoming central register, please email Colette Reeves at cosec@rjp.co.uk.