Premium
Corporate Ownership and Control in the UK: The Tax Dimension
Author(s) -
Cheffins Brian R.,
Bank Steven A.
Publication year - 2007
Publication title -
the modern law review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.37
H-Index - 22
eISSN - 1468-2230
pISSN - 0026-7961
DOI - 10.1111/j.1468-2230.2007.00663.x
Subject(s) - corporate governance , control (management) , investment (military) , corporate tax , shareholder , accounting , business , dimension (graph theory) , tax deferral , income tax , market economy , inheritance (genetic algorithm) , economics , public economics , monetary economics , tax reform , tax avoidance , finance , state income tax , gross income , law , political science , management , politics , mathematics , pure mathematics , biochemistry , chemistry , gene
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.