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The law is intended to increase tax transparency and
penetrate secret ownership of networks of corporations registered in the UK’s
large network of territories, some of which have long been used as tax
As one member of parliament remarked, “Britain sits at the
hub of world’s largest network of secretive jurisdictions, and British tax
havens are central to the movement of illicit money around the world.”
The new law would require each territory to set up a public
register detailing the underlying ownership of each corporation by 31 December
2020. If a territory has not done so, the UK secretary of state can prepare an
order forcing the territory to do so.
Not surprisingly, there is widespread opposition to the new
law in the territories, with the British Virgin Islands and Bermuda being
particularly vocal. And some members of parliament noted the possible adverse
effects on territories such as Anguilla and the Turks and Caicos Islands, which
are still recovering from the catastrophic 2017 hurricanes.
Nevertheless, amidst a worldwide effort to identify and weed
out cross-border tax evasion, such as BEPS and country-by-country tax
reporting, the new measure will go into effect.
Related: Mobilizing Your Brexit Strategy
Registers of beneficial owners can be helpful in a number of
contexts, including tax liability, privacy, and identifying corrupt practice