All your resources at your fingertips.Learn More
All your Private Client resources at your fingertipsFind Out More
Analyses the advantages of UK companies in international tax planning
* Call 0117 917 5100 to find out more about online services
"A tax book to treasure ... a time-saver for busy practitioners ... a succinct and convenient source of advice"Click here for the full review
"[a] timely and useful book ... presented in a clear and accessible format ... a most valuable addition to any tax planner's bookshelf"New Law Journal
"an excellent guide to the subject ... of immense value not only to professional practitioners in this area, but also to directors and management of international enterprises, and their overseas advisers ... concise and well written"Offshore Investment
This note updates readers on the subject of the UK company beneficial owners’ register which is dealt with in Chapter 8 of the book. In section 8.22 of chapter 8, the question was asked “will this Bill become law?” This was the Small Business Enterprise and Employment Bill. The answer is that the Bill did become law on 26 March 2015 – just after the publication of the book.
Section 8.21.1 of chapter 8 of the book showed a way of protecting indirect participators in UK companies by making them discretionary beneficiaries of a Jersey trust whose discretionary trustees own the UK company’s shares. The section stated “Professionals advising on this solution to the problems, posed by the PSC register should await the Secretary of State’s guidance on the meaning of “significant influence and control”.” This statement was made because if a trust owns the UK company’s shares, and an individual X has the right to exercise, or actually exercises significant influence or control over the activities of the trust, X is a PSC of the company whose shares are owned by the trustees.
Draft guidance has now been circulated. The government have stated that “this is a rough and incomplete draft. It has not been approved by government, or government lawyers”. Nevertheless this must be getting close to the final draft.
Section 6.2-6.3 of the draft guidance on the meaning of “significant influence and control over the activities of a trust” are reproduced below:
6.2 - An individual would be considered to be exercising significant influence or control over the activities of the trust if they have the right to, or actually exercise powers over the activities of the trust. The following is a non-exclusive list of examples, where we would consider that an individual is exercising significant influence or control over the trust;
It is not clear why a power to appoint or remove trustees results in significant influence or control over the activities of the trust, if the other powers referred to in section 6.2 above are not reserved to the hypothetical individual “X” but are retained by the trustees under an irrevocable discretionary trust (So no-one has power to revoke the trust).
It is clear from the last bullet point in 6.2 that communications between settlors and beneficiaries on the one hand, and trustees on the other, will need to be managed carefully. However, professional trustees in reputable and well-regulated territories like Jersey will not generally tolerate being issued with instructions (or if they are, will decide themselves whether to follow the instructions). That said, it is clear that communications to trustees should always be precatory in nature, and not couched in imperative terms.
Until the draft guidance referred to above is approved by the Secretary of State, it remains subject to possible amendments.
Finally it appears that the offshore jurisdictions referred to in footnote 24 of chapter 8 will succeed in resisting the concept of a public register of beneficial owners, although service providers in the offshore jurisdictions will have to be able to provide timely access to beneficial owner details from their private records to competent authorities.
Have a question about this product? Please get in touch by completing the boxes below.
Presents an in-depth analysis of a range of highly topical issues of great significance in the...
"An invaluable source of succint articles that are always currently relevant and contain the ...