The recent leak of records held by the Panama-based legal firm Mossack Fonseca (the ‘Panama Papers’) has concentrated public and media attention on the extent to which the beneficial owners of assets may be hidden behind company and trust structures, either in the UK or overseas. However, this lack of transparency is not a new issue but one that the UK Government has been addressing by means of a number of initiatives over recent years.
- In June 2013 the G8 ‘Lough Erne Declaration’ included a commitment to transparency as regards the beneficial ownership of companies and in November 2014 G20 leaders adopted a statement of principles regarding beneficial ownership transparency for both companies and trusts.
- In March 2015 the UK parliament finalised legislation introducing a requirement (effective in 2016) for UK companies to maintain details of their beneficial ownership, and to provide this to Companies House, by means of a ‘PSC Register’ (a register of ‘persons with significant control’).
- In November 2015 the Government indicated that trustees would be required to obtain and hold current beneficial ownership information, including details of the settlor(s), trustees and beneficiaries, and that a central register of beneficial ownership information would be introduced for those trusts that generate tax consequences in the UK.
- In March 2016 the Government published a discussion paper setting out proposals for a register of beneficial ownership of foreign companies owning property in England or Wales or participating in public contracting in England.
- In April 2016 the UK reached an agreement with Germany, France, Italy and Spain for automatic exchange of information on the beneficial ownership of companies and trusts. By the middle of May 40 countries had committed to join this initiative.
- As a separate matter, the UK has reached agreement with its overseas territories and with the Crown dependencies that they will provide UK law enforcement and tax agencies with full access to information on the beneficial ownership of companies.
It appears that the tide has now turned decisively in favour of transparency and individuals may have to accept that wealth held through companies and trusts will increasingly be a matter of public knowledge.
Please see our detailed factsheet
for further information.