Corporate Ownership and Control in the UK: The Tax Dimension

Posted: 11 Sep 2007

See all articles by Steven A. Bank

Steven A. Bank

University of California, Los Angeles (UCLA) - School of Law

Brian R. Cheffins

University of Cambridge - Faculty of Law; European Corporate Governance Institute (ECGI)

Abstract

While generally the impact tax has on patterns of corporate ownership and control has received little attention in the relevant academic literature, this paper argues that tax is potentially an important determinant of ownership patterns in large companies. The paper focuses on historical developments in Britain, where an outsider/arm's-length system of corporate governance took shape during the twentieth century and became fully entrenched by the end of the 1970s. Taxes imposed on corporate profits, taxation of managerial and investment income and inheritance taxes help to explain why during this period blockholders sought to exit and why there was sufficient demand for shares among investors to permit ownership to separate from control.

Keywords: corporate ownership, tax developments in Britain, corporate profits, taxation of managerial and investment income, inheritance taxes

Suggested Citation

Bank, Steven A. and Cheffins, Brian R., Corporate Ownership and Control in the UK: The Tax Dimension. Modern Law Review, Vol. 70, No. 5, pp. 778-811, September 2007, UCLA School of Law, Law-Econ Research Paper No. 07-10, Available at SSRN: https://ssrn.com/abstract=1013369

Steven A. Bank

University of California, Los Angeles (UCLA) - School of Law ( email )

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Brian R. Cheffins (Contact Author)

University of Cambridge - Faculty of Law ( email )

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European Corporate Governance Institute (ECGI) ( email )

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