New United Kingdom Law Requires Maintenance of Public Beneficial Ownership Registers

On 23 May 2018, a new law was enacted in the United Kingdom that requires each UK territory to set up a public register of the beneficial ownership of corporations in its jurisdiction.

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 havens. 

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

How This Impacts Mobility

Registers of beneficial owners can be helpful in a number of contexts, including tax liability, privacy, and identifying corrupt practice issues.

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