United Business Media plc (UBM) has announced plans to relocate its tax residency
from the UK to the Republic of Ireland to take advantage of the latter country's
"less complex system of taxation".
Under the proposals, a new UBM holding company would be created which is UK-listed,
incorporated in Jersey, but resident for tax purposes in Ireland.
If the plan is approved by shareholders,
UBM will be following in the footsteps of drug maker Shire, which on 15th April announced
proposals for a similar corporate structure to "protect the group's taxation position".
According to UBM's statement announcing the plans, released on Monday,
the new structure reflects the development of UBM into an international business-to-business
media and news distribution organisation, which operates in more than 30 countries
worldwide and now generates more than 85% of its profits outside the United
Kingdom.
UBM’s major international brands include PR Newswire, Game Developer
Conference, Interop and CPhI.
The company expects the proportion of its earnings generated overseas to continue
to grow, as it continues its strategy of building businesses internationally,
particularly in fast-growing economies such as China, India, Latin America and
the Middle East.
During the last three years, UBM has invested GBP386mn (USD759mn) in 52 acquisitions,
39 of which, totalling GBP310mn, have been made outside the UK.
During this
period, UBM has further expanded its international presence, opening a significant
number of new offices, including in Chengdu, Mumbai, Sao Paulo and Dubai.
For historical reasons, the United Business Media group’s parent company
has been tax resident in the UK. However UBM has been progressively
disposing of its UK media businesses, including the Anglia, HTV, Meridian and
Channel 5 television franchises, Express Newspapers, NOP market research and
Exchange & Mart.
"Consequently, the Board of UBM now believes that the long term interests
of UBM and its Shareholders are best served by the adoption of an international
holding company corporate structure that domiciles UBM’s parent company
in the Republic of Ireland, which has a less complex system of taxation,"
the company's statement explained.
It continued: "In contrast, the UK tax system imposes tax on all companies in a worldwide
group, and consequently UBM has had to manage the interaction between the UK
tax system and the tax systems of the multiple countries in which UBM operates.
This has given rise to both significant compliance costs and risks of inadvertent
tax charges arising."
If approved by shareholders, the new structure is expected to become effective on
30th June, 2008. The restructured UBM group will have the same board and management team, and will
be listed on the London Stock Exchange (LSE).
Free Tax-News
RSS Feed