A tax expert has urged the UK Government to put safety concerns ahead of calls for full beneficial ownership transparency, as India becomes the latest to join the list of countries committed to sharing information via a new register.
Sean Wakeman, head of tax investigations at the London-headquartered Crowe Clark Whitehill accountancy firm, said he welcomed the global move toward tax transparency, and believed that should exist, but was concerned that too much transparency could lead to unnecessary safety concerns for many.
He warned that the UK Government’s moves “must be tempered by arrangements that have been put in place for reasons completely unconnected with tax”.
“This will apply particularly to individuals who come from politically unstable countries or territories that seek unlawfully to take possession of assets and land,” said Wakeman. “In such situations, individuals are more concerned with preservation of their family assets.
“Public beneficial ownership registers not only runs the risk of undermining ‘legitimate’ secrecy but also compromising the personal safety of individuals and their families.”
Rather than being made “public”, he said such registers should only be made available “to trustworthy tax authorities, with which there are already established exchange procedures”.
The drive towards greater transparency with respect to beneficial ownership of assets held in trusts, bank accounts and similar financial instruments has come in the wake of the controversy that followed the leak of some 11.5 million confidential documents from a Panamanian law firm, Mossack Fonseca. The “Panama Papers”, as these documents came to be known, were presented to the world in April by a US-based journalism organisation, the International Consortium of Investigative Journalists.
Growing list of countries
In a statement on its website earlier this week, the UK Government confirmed that India was the latest to be added to a list of countries that have committed to the initiative to automatically exchange information on beneficial ownership.
The statement said that the next stage will be for the development of a global standard for this exchange, but full details of how exactly that the information will be shared, or made public, have yet to be finalised.
The list of countries that have agreed to share information is as follows: Afghanistan, Anguilla, Austria, Belgium, Bermuda, Bulgaria, Cayman Islands, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Gibraltar, Germany, Greece, Hungary, Iceland, India, Isle of Man, Ireland, Italy, Jersey, Latvia, Lithuania, Luxembourg, Malta, Mexico, Montserrat, Netherlands, Nigeria, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, the United Arab Emirates and the United Kingdom.