Comments on: An interesting question

By: jonathan

jonathan — Fri, 09 Jan 2009 15:31:48 +0000

I think there is some confusion of terminology here.

There are lots of ways of “redomiciling”.

Functionally, you can go the Shire route of just introducing a new holding company (typically using a cancellation scheme under Part 26 of the Companies Act 2006) .

Literally redomiciling – by which I mean turning an existing English company into a foreign company – is harder and not really necessary given the above. But it could be done under the new European Merger Regulations.

By: Terry

Terry — Thu, 08 Jan 2009 20:48:31 +0000

Basically there are simply a number of different jurisdictions, each with tax or trading rules for companies about entering the jurisdiction, the period in the jurisdiction, and exiting the jurisdiction. Those in charge of a company will assess the rules and any other considerations they deem relevant, and decide where they want to base the company. There is no obligation to base a company in one jurisdiction rather than another. The rules of one may be altered to entice a company to base itself there rather than anywhere else, while the opposite also applies, sometimes as a result of the law of unintended consequences (eg putting up tax rates).

By: MarkS

MarkS — Thu, 08 Jan 2009 19:29:46 +0000

Wouldn’t a simplified tax structure be horrendous? There’d be starving accountants lining up outside soup kitchens. Much better this way.

By: Mark Wadsworth

Mark Wadsworth — Thu, 08 Jan 2009 17:09:07 +0000

Dear all, you can’t just glibly talk about multinationals like this.

Domicile is probably a meaningless term anyway, what is important is country of incorporation and country of tax residence, and to a lesser extent, what stock exchange the holding company is quoted on. These are all quite distinct concepts and it possible for a country to be ‘domiciled’ (whatever that means) in Country A, incorporated in Country B, tax resident in Country C and quoted on the stock exchange in Country D.

Shire plc, as it happens, continues very much to be UK resident – how they did it was to set up a new holding company (Jersey incorporated, for whatever reason, but apparently Irish tax resident) and the new company acquired all the shares in plc on a one-for-one basis.

So a Shire shareholder used to have x shares in Shire plc and now has x shares in a new holding company that is tax resident in Ireland.

By: Kay Tie

Kay Tie — Thu, 08 Jan 2009 15:41:56 +0000

“to the best of my knowledge”

Ahem.

By: Johnathan Pearce

Johnathan Pearce — Thu, 08 Jan 2009 15:12:56 +0000

Tim, you really have to give up this Murphy addiction; it is almost as bad as Oliver Kamm fisking Chomsky or Stephen Pollard going after that jokester, Neil Clark.

By: Richard Murphy

Richard Murphy — Thu, 08 Jan 2009 15:08:32 +0000

Tim

It’s only possible in the UK with a private act of parliament – to the best of my knowledge – based on the fact that such Acts have been passed

Not quite the same as in the tax haven world

Richard

Tim adds: Richard, sorry, but you’re some years out of date. You’ve written some amount about companies like Shire Pharmaceuticals moving their domicile. There were no private acts of parliament necessary for them to do that, were there?