Parliamentarians Back UK Legal Amendment Forcing Increased Offshore Tax Transparency

Josh O'Neill

21 December 2016

A cross-party group comprised of 81 MPS have backed a legal amendment which would force offshore UK territories to publish the names of the true owners of companies as part of ongoing efforts to crack down on tax evasion and money laundering.

UK overseas territories, including the British Virgin Island and the Cayman Islands, have established large financial services industries due partly to the anonymity that these particular jurisdictions can offer clients.

Although the UK legally requires companies to disclose true ownership to combat illicit money flows while ensuring assets cannot be hidden from creditors, offshore territories have resisted publishing information relating to companies' owners or directors. They argue that while it is fair to co-operate in specific investigations of alleged wrongdoing, general disclosure of beneficial ownership on public databases compromises legitimate financial privacy. Some experts have argued that public registers are not necessarily the most suitable approach to weeding out illicit money anyway. (To see an example of such a view, click here.)

Earlier this week, MP Margaret Hodge reportedly said she planned to table an amendment to the UK government's Criminal Finances Bill that would oblige these UK-owned jurisdictions to adopt the same tax transparency standards as the rest of the UK by 2020.

“The government can’t possibly claim to be tackling corruption without getting a grip on the tax havens that are under the UK’s umbrella which facilitate all kinds of corruption and tax avoidance and evasion,” Hodge said in a statement this week, according to media reports., adding that she has support from enough parliamentarians from the ruling Conservative party to force the government's hand on the issue.

WealthBriefing has contacted Hodge's office to confirm the accuracy of her statements.