The communique from the G8 summit ion Lough Erne in Northern Ireland in 2013 said:
[E]ach of us will ... tackle this issue to ensure that companies know who really owns and controls them by requiring companies to obtain and hold information on their beneficial ownership, and to ensure that this information is available in a timely fashion to law enforcement, tax collection agencies and other relevant authorities as appropriate, including financial intelligence units
It's a fundamentally important idea. I have been working on achieving that goal for many years. In that case it is interesting to note the web site of London lawyers Charles Russell Speechlys on which they say
Controversial recent changes to UK and EU law combined with parallel G8, G20 and OECD measures risk the beneficial owners of certain companies being subjected to unwanted public scrutiny. However, help is at hand for affected individuals.
They then add:
Reacting to concerns about tax evasion, money laundering and the funding of terrorism (and probably in an attempt to take the wind out of the sails of some tax campaigners), the UK Government has helped to make “transparency” about the beneficial ownership of companies an international priority.
and:
The UK has gone further and has unilaterally introduced, together with a number of other wide-ranging measures, a full, publicly accessible, register of the details of the beneficial owners of companies (but not partnerships, including LLPs) which are incorporated in the UK.
After which they explain the new rules before saying:
Of course, for the overwhelming majority of individuals affected by these new rules, the Government's concerns about tax evasion, money laundering and terrorist financing will seem misplaced, as very few (if any) UK companies are used to evade tax or to engage in nefarious activities.
Individuals have historically put in place corporate structures for a number of reasons. Family Investment Companies are used as a kind of fund for holding family assets, allowing value to be passed down the generations without wealth being dissipated. Companies can also be used to ensure the privacy of individuals and to protect the confidentiality of their personal affairs. In an age of notorious press intrusion and prurient public interest in high net worth individuals, the requirement for such structures will not diminish. Yet the UK's new transparency rules apparently cut across these needs.
So let me get that right. In the minds of Charles Russell Speechly those who avoid taxes on wealth should have the right of privacy to ensure that they can continue to do so? It seems that they really do think so, for they continue with this offering:
SOLUTIONS FOR AFFECTED CLIENTS
We are pleased to confirm that, depending on the circumstances, and notwithstanding the new UK rules, it is still possible to have the benefits of corporate structures without the obligation to disclose information about beneficial ownership on a publicly available register. Furthermore, such companies can be tax resident either in the UK or overseas as circumstances require.
Nevertheless, the UK, European and international laws relevant to such companies are numerous and complicated and it is important that advice is taken from lawyers accustomed to dealing with the particular issues raised by such structures.
In other words, just roll up with your cheque book and we'll tell you how to get round the law and keep those nasty tax campaigners at bay.
The paranoia on display is staggering.
So too is the gall.
But I suppose I should also say so too is the honesty. They're not hiding the fact that they are deliberately subverting the will of parliament. I guess I should give them full marks for that.
I'm quite sure they are not alone.
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The communique is quite clear that it is about “law enforcement, tax collection agencies and other relevant authorities”, not public access to this information.
So I think it is quite safe for him to say that “the UK has gone further and has unilaterally introduced” something beyond that.
Whilst I am sure that people do try to avoid paying taxes on wealth I am not sure he is necessarily referring to that. “Allowing value to be passed down the generations without wealth being dissipated” sounds to me like using structures to prevent certain individuals in a family from selling the family silver to pay for an extravagant lifestyle.
That was the will of parliament
It is law
And they are subverting it
My argument is correct
I disagree Richard. This is arrogance rather than honesty. The audacity and blatant disregard for the will of parliament from Charles Russell Speechly in staggering. This is pure opportunism and has absolutely nothing to do with the traditional role of either an individual lawyer or firm of lawyers providing legal advice to individuals and/or corporations. Reading this clearly says to me that the government will be introducing a public register of beneficial owners, the importance of privacy for high nett worth individuals and the threat to that privacy from “notorious press intrusion and prurient public interest in high net worth individuals” This is blatant scaremongering. To the best of my knowledge, nobody knows exactly what registers of beneficial ownership registers will look like and unless I have got it all wrong, they most probably will not be publicly available.
Having scared people half to death by this stage, Charles Russell Speechly then declare that all is not lost. They may well have a solution, but it’s very complicated so just come over to see us and we’ll sort everything out. Ps. don’t forget to bring your cheque book or visa card. This is basically the same tactic used by the banks to mis-sell PPI products to their customers.
It remains to be seen just how robust the new beneficial owner registers will be. Another important point is that with an additional £80million being cut from the HMRC budget for 2015/16 and further cuts in the future a possibility at least, who is going to make use of the information on the registers? because as far as I can see HMRC won’t have the resources to search and use the information.
The registers will be publicly available
But they will not be robust
That is the real issue
No doubt they will exploit that