Abstract

"The Union Corporation, Taxation, and Corporate Strategy"

Simon Mollan, University of York (simon.mollan@york.ac.uk)

In February 1953 the Union Corporation–a mining company operating in South Africa–lost an appeal against a ruling by the UK tax authorities that they had the right to tax the company’s profits at the highest rate, and that benefits under section 39 (1) of the Finance Act 1947 that established that non-resident companies were not liable for the higher rate did not apply to the Union Corporation. The appeal ruling indicated that the company was resident in both the UK and in South Africa for tax purposes. Consequently, the Union Corporation found that they owed £468,500 in taxation, equivalent to £80 million in 2024 prices. This then sparked a protracted process initiated by the Union Corporation to change its domicile to Johannesburg for tax purposes, something that required UK Treasury approval. In 1957 the Treasury turned down Union Corporation’s application, but a further application made in 1962 was approved, and the Union Corporation subsequently shifted domicile in September of that year. Using Treasury records from the UK National Archives and contemporary reporting in the Financial Times, The Times, and the Economist, this paper reconstructs the critical events in relation to the strategy of the Union Corporation and the policy discourse of the UK government. This is used to explore how changes to international taxation shaped corporate strategy and structure in this period. This paper contributes to the growing business history literature dealing with corporate strategy, domicile, and taxation (Mollan and Sævold 2025; Mollan and Tennent 2015; Mollan, Frank, and Tennent 2020; Gehlen and Marx 2022; Ogle 2023; Woker 2025).