Corporate Ownership and Control in the UK: The Tax Dimension
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)
Modern Law Review, Vol. 70, No. 5, pp. 778-811, September 2007
UCLA School of Law, Law-Econ Research Paper No. 07-10
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 taxesAccepted Paper Series
Date posted: September 11, 2007
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