Corporate Ownership and Control in the UK: The Tax Dimension

34 Pages Posted: 27 Aug 2007

See all articles by Brian R. Cheffins

Brian R. Cheffins

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

Steven A. Bank

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

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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.

Suggested Citation

Cheffins, Brian R. and Bank, Steven A., Corporate Ownership and Control in the UK: The Tax Dimension. Modern Law Review, Vol. 70, No. 5, pp. 778-811, September 2007. Available at SSRN: https://ssrn.com/abstract=1008631 or http://dx.doi.org/10.1111/j.1468-2230.2007.00663.x

Brian R. Cheffins (Contact Author)

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge, CB3 9DZ
United Kingdom
+44 1223 330084 (Phone)
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European Corporate Governance Institute (ECGI)

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Belgium

Steven A. Bank

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

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States
310-794-7601 (Phone)

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