Increasing public disquiet over the use of ‘tax haven’ companies and trusts to disguise the beneficial ownership of businesses and properties has led to the Government taking steps to improve the transparency of ownership. Such arrangements are often used for money laundering and/or aggressive tax avoidance (and sometimes evasion) activities or to hide undisclosed or illegal assets from the authorities.

Since 6 April 2016, it has been compulsory (under the Register of People with Significant Control Regulations 2016) for most UK companies and Limited Liability Partnerships (LLPs) to disclose publicly the details of their owners and who has ultimate control over them. All relevant organisations are required to keep a register of People with Significant Control (PSC) and, from 30 June 2016, this information will have to be filed by most companies for public inspection at Companies House.

A PSC can be a UK-resident individual or company. A PSC is required to inform a company or LLP of their interest. Failure to comply with the Regulations will constitute an offence which may lead to imprisonment for up to two years per offence. The interest to be disclosed need not be a direct interest and the legislation will normally catch PSCs involved with UK companies through the medium of an offshore company or trust if they have significant control over the non-UK entity.

In a limited company, a PSC is anyone who:

• directly or indirectly holds more than 25 per cent of the company’s nominal share capital or controls more than 25 per cent of the voting rights; or
• exercises or has the right to exercise significant influence or control over the company or a trust or firm that would be a PSC in its own right; or
• has the indirect or direct right to control the composition of a majority of the board of directors.

The rules for LLPs are very similar.