The new register of companies' beneficial owners won’t prevent “real owners” taking refuge, as James Mather explains
The new requirement on English companies and LLPs to hold a register of “people with significant control” (PSCs), which applies from 6 April 2016, is designed to “bring information about company ownership into the open”. Obscure company ownership structures, the government stresses, can “facilitate tax evasion, money laundering and even terrorist financing”. It hopes that the register will impede such abuses by revealing “who is behind a company””, and has trumpeted the new register in the wake of the Panama Papers affair.
With such high expectations, one would therefore have expected the new rules to make clear that offshore discretionary trust structures are a primary target. While having their legitimate uses, after all, these are also the pre-eminent vehicle for obscuring ownership from creditors, spouses, tax authorities and the like. The “real owners” behind companies held in this way are surely the discretionary beneficiaries, often the settlor and members of his family. Where such beneficiaries make a request for advances of assets from the trust, it is the
