The Sanctions and Anti-Money Laundering Bill, which is currently being debated in the House of Commons, will require tax havens such as the British Virgin Islands and the Cayman Islands, to introduce public ownership registers. This means these territories will have to publish details of the true owners of companies based there, which will lead to greater transparency in relation to assets held offshore.
Facing a possible Commons defeat, the government had to back down after a number of Tory MPs supported the cross-party amendment.
The use of offshore tax havens is an increasingly political issue. In the post-Brexit world, the UK government needs to demonstrate that it is fulfilling its international obligations and taking a firm stance around activity that is perceived as morally dubious or potentially illegal. It is keen to avoid being tainted by any perception of supporting such activity, particularly after previous scandals, such as the so called Panama Papers, leaked files from law firm Mossack Fonseca.
Whilst the political climate is very much around actively discouraging the use of tax havens, there may be legitimate reasons why individuals and corporate entities choose to hold assets offshore. These reasons can include tax efficiency, privacy, regulation and international reach.
There are also questions around how such registers would work and what the impact would be on the jurisdictions and the individuals and corporate entities involved.