Grants / Projects we are funding

Tax Justice Network – A global asset register – UK pilot study

Grant details

Amount:£100,000

Awarded on:01/06/2019

Duration:15 months

Status:Live

Area of interest

Systems change

Themes covered

Regulation

How can we begin to design out inequality when we do not understand how and by who all of our assets are owned? This is the question underlying this ambitious project, led by the Independent Commission for the reform of international corporate taxation, to tackle global inequality through shining a light on asset ownership as a first step to creating policies to tackle unfairness. It will use the UK as a case study to explore exactly what it would take to establish an asset registry.

What is the issue?

Wealth inequality poses serious risks to economies, to societies more broadly, and to the functioning of democracies. And yet the actual magnitude of wealth inequality is unknown because of the deep financial secrecy that surrounds it. The use of ‘offshore’ structures – companies, trusts, foundations and financial instruments held in or via other jurisdictions – allows not only the real ownership of wealth to remain hidden, but also its location and perhaps its very existence. As this wealth escapes taxation, it fuels inequality. As a growing body of academic research and media investigations such as the Panama and Paradise Papers has shown, this same secrecy also creates fertile ground for financial crimes such as corruption, money laundering, tax evasion and avoidance, and the funding of terrorism. Wealth secrecy also helps kleptocrats to concentrate power, doubling down on the damage they can cause.

What will the project try to achieve?

The taxation of wealth is an issue that is rising very fast up the political agenda and in the public consciousness. The creation of a global asset register (GAR), where details of global ownership of assets are recorded, could change dramatically the scope for policymakers and the public to understand and to address wealth inequality. Despite the scale of hidden wealth, the existing data-collection infrastructure (land registries, central depositories of securities) and recently introduced transparency measurements (automatic exchange of information, registers of beneficial ownership and country by country reporting by multinationals) include potentially powerful tools for transparency. This information alone, if joined up by consistent legal entity and taxpayer identifier numbers, would provide a powerful core of transparency on wealth inequality. However, as of today the effectiveness of the implementation processes that underpin the above transparency measurements is unclear. A GAR has therefore been proposed to provide the missing wealth data, and to ensure the necessary linkages are made between the above transparency mechanisms.

ICRICT will undertake a pilot project to determine the associated design, scope issues, and capacity constraints of creating a GAR, by exploring the feasibility and relevance of creating an Asset Register in the United Kingdom. The United Kingdom is a major financial center and is already subject to some form of wealth registration (real estate, beneficial ownership of companies, securities), but has also been shown repeatedly to have provided anonymous ownership as part of international corruption and tax abuse scandals.

Who might be interested in this project?

Policy makers, civil society, journalists, businesses