In response to a press article published in the UK on Wednesday, Henderson Group plc has confirmed that it is considering a potential change in its tax domicile from the UK to the Republic of Ireland.
The asset management firm issued the statement confirming that it is reviewing
its tax position following an online report published by the Daily Telegraph,
which suggested that an agreement sealing its new tax residence has already
been struck.
The company stated that further details of the tax review will be given in
its interim results, which are due to be released on Thursday morning.
Henderson Group plc is the holding company of the investment management group
Henderson Global Investors. Henderson Group is headquartered in
London and since December 2003 has been dual-listed on the London Stock Exchange
and Australian Securities Exchange.
The announcement comes on the back of recent speculation that Brit Insurance,
the Lloyds of London firm, is examining the possibility of redomiciling overseas
for tax purposes.
Despite a recent cut in the rate of UK corporation tax by 2% to 28%, a number
of other firms in the FTSE 250 have also announced plans, or are said to be
reviewing plans, to leave the UK in the light of growing uncertainty about its
corporate tax regime, particularly with respect to tax on international profits.
According to the Telegraph, City lawyers and accountants are privately warning
that as many as 15 of Britain's biggest companies are working on plans to relocate
for tax purposes in foreign jurisdictions.
In its 2007 Budget, the government put forward proposals for eliminating the
foreign dividend tax in order to reduce the administrative burden for international
businesses, while at the same time putting in place tough measures on the permitted
overseas activities of such firms, in order to prevent them from using the dividend
exemption to avoid paying tax in the UK altogether.
However, the UK Treasury made moves last month which appeared to indicate that
it has stood down its proposals to change the way that the foreign profits of
UK-based multinationals are taxed.
Tax experts have warned that this continuing uncertainty is damaging UK competitiveness.
"Overall, the Treasury announcement is a sensible response to a constructive
period of consultation, but it is disappointing that progress has been so slow,"
Heather Self, an international tax partner at Grant Thornton, commented following
the government's update on the proposals in July.
"It is now unlikely that we will get any concrete policy on the taxation
of foreign profits before 2010 at the earliest and at that point we may well
be in the middle of an election," she added.
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