A MP’s private member’s bill which would extend UK legislation on beneficial ownership to the Isle of Man has been branded a throwback to 19th Century colonial attitudes.
But the Corporate and Individual Tax and Financial Transparency Bill, being led by former Labour Environment Minister Michael Meacher, does not have government support and is unlikely to be passed.
The Bill, drafted by arch tax haven critic Richard Murphy, was scheduled to be read for a second time in the House of Commons on September 6 but the debate was adjourned to November 1 following a delaying government ‘filibuster’.
Mr Meacher’s Bill amends the Companies Act so that the name, date of birth and nationality of all beneficial owners of shares have to be registered with the authorities including the identity of any intermediate companies, trusts or other arrangements that act as agents or nominees.
But section nine would oblige the same provisions to extend to all Crown Dependencies and Overseas Territories. They would be extended by an Order In Council.
It would mean that an island-incorporated entity would be required to identify any beneficial owner resident outside the jurisdiction and advise the money laundering authority here. The authority would publish that information on a freely-available database and advise HM Revenue and Customs if that beneficial owner was resident in the UK.
In the second reading debate, Mr Meacher told MPs: ‘In order to avoid an obvious loophole, the requirement for a company to have information on its beneficial ownership and its accounts on public record—on its own website, or wherever—would be extended to the tax havens in Britain’s Crown Dependencies and overseas territories, although of course only if the company in question had a beneficial owner outside that territory.’
But the right of the Crown Dependenices to regulate their own affairs was defended by Tory Jacob Rees-Mogg.
He said: ‘I stand four-square in favour of the rights of the Crown Dependencies, by and large, to regulate their own affairs.
‘The Bill is again onerous for territories that, by and large, are no longer treated as mere colonies. The Crown dependencies are allowed to develop and run their own affairs. The Bill is a throwback to how this country behaved in the 19th century when we felt we had a greater right to order about the non-dominions.
‘We seem to be taking the Crown dependencies back to a period before dominion status started to be granted. I consider that to be undemocratic, and unfair on them. It attacks their fundamental livelihoods, namely, their ability to provide financial services and a degree of confidentiality at the same time.’
Manx legislation already obliges companies and trusts to register beneficial owmnership with the authorities but that information is not available to the public.
