A push from US legislators for legislation that would block corporate inversions proved unsuccessful this year but new rules from the Treasury Department this week could deter companies from moving their headquarters overseas for tax reasons.

The inversions - a controversial business transaction - sees a company move its legal address offshore while their place of operation remains in the US.

Outrage at the controversial business transactions prompted a wave of companies to be branded as "unpatriotic" for their plans to move to the Island with the net effect that they would shave million off their US tax bills.

But new Treasury rules issued this week would force companies to warn shareholders of the move as they could be required to pay a tax penalty, according to a report in the Wall Street Journal.

Companies would also have to notify the Internal Revenue Service (IRS) of the proposed move.

The new rules from the Treasury were said to represent a further effort "to make tax havens less appealing".

But the rules issued on Tuesday would also seek to make the moves costlier for shareholders, according to the report.

"The Treasury now will require companies that relocate in tax havens to notify both shareholders and the Internal Revenue Service (of their plans).

With that information, the IRS will be better equipped to check whether shareholders are paying tax penalties on the relocations." it said.

Federal law requires taxpayers to pay capital-gains taxes on the difference between the price they paid for the shares and the value of the shares at the time of the move.

The tax can be paid by the company, but most companies arrange for shareholders to pay the bill.

With the recent election of a Republican-controlled House and Senate, some have predicted that the corporate inversion debate - which has been a hot topic of debate on Capitol Hill and in the media since early in the year - would die off, but the news report said the Bush administration and congressional leaders could seek further curbs next year on any "Bermuda tax dodges" including slapping more restrictions on the companies themselves.

Treasury officials have however, in the past, said that they would also take an in-depth look at the American tax code, seeking to make the code more competitive, especially for US companies competing in the global marketplace.