Scores of UK company directors are preparing to sell their shares ahead of April 6 to avoid an 80% hike in capital gains tax. Insurance company Towergate is the biggest company so far to reveal it is planning to sell a 25% holding to private equity firm Candover, mainly to avoid the tax change from 10% to 18% on business assets.
Andy Homer, Towergate chief executive, told The Daily Telegraph the reason for the deal was to cash in before CGT changes came into force at midnight on April 5. ‘It's an opportunity to avoid an 80% increase in tax,’ he said.
The Financial Services Authority has been inundated with requests for clarification on how companies should disclose directors' dealings to such an extent it has been forced to promise new guidance within two weeks to ensure investors remain fully informed.
Tony Cohen, Deloitte head of private client services, said many of his firm's clients were considering a sale, including directors of FTSE 100 companies. ‘It's prudent for a director to consider how they might benefit from the 10% on shareholdings now that it will change to the 18%,’ he said.
Further reading:
Insurers in last-ditch bid to get CGT scrapped
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