Headline:
Leading entrepreneurs cash in on CGT changes
Description:
So many company directors have rushed to sell their shares ahead of the 6 April 2008 Capital Gains Tax (CGT) changes that the Financial Services Authority has been forced to issued new guidance on director’s share dealing. Some of the highest profile names in British enterprise culture have disposed of substantial share holdings either outright or by making transfers to spouses and family trusts in order to preserve indexation allowances or crystalise gains ahead of the introduction of the new CGT regime.
According to newpaper reports directors who have made large disposals include Clara Furse, chief executive of the London Stock Exchange, inventor Sir James Dyson and former science minister Lord Sainsbury, whilst those transferring shares to their wives include Iain Paterson, chairman of ITE Group and Chris Wright, the major shareholder in Crysalis.
The FSA’s new guidance states that directors should give careful consideration about their disclosures on share dealings to the market so that “it will not be misled about the transaction’s nature and purpose and will know that the transaction was undertaken for CGT reasons.”
The main CGT changes to affect entrepreneurs is the removal of taper relief, combined with a loss of the indexation allowance on assets acquired pre April 1998. Whilst Business asset taper relief reduced CGT to 10% providing assets had been held for two years, its sucessor from 6 April 2008 is Entreprenuer’s relief which reduces CGT on the first £1 million of gains to 10%, thereafter gains will attract 18% in tax. There is no replacement for the indexation allowance.
source: accountingweb.co.uk
According to newpaper reports directors who have made large disposals include Clara Furse, chief executive of the London Stock Exchange, inventor Sir James Dyson and former science minister Lord Sainsbury, whilst those transferring shares to their wives include Iain Paterson, chairman of ITE Group and Chris Wright, the major shareholder in Crysalis.
The FSA’s new guidance states that directors should give careful consideration about their disclosures on share dealings to the market so that “it will not be misled about the transaction’s nature and purpose and will know that the transaction was undertaken for CGT reasons.”
The main CGT changes to affect entrepreneurs is the removal of taper relief, combined with a loss of the indexation allowance on assets acquired pre April 1998. Whilst Business asset taper relief reduced CGT to 10% providing assets had been held for two years, its sucessor from 6 April 2008 is Entreprenuer’s relief which reduces CGT on the first £1 million of gains to 10%, thereafter gains will attract 18% in tax. There is no replacement for the indexation allowance.
source: accountingweb.co.uk
Date:
03.04.2008
2008-04-03...
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