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Tycoons ditch shares in rush to beat tax rise
Nick Goodway, City Correspondent2 Apr 2008
Dozens of wealthy company bosses and tycoons have been rushing to sell shares to avoid millions of pounds of extra tax.
A shake-up in the capital gains tax regime means they must offload the shares by 5 April, the end of the tax year, when the minimum rate goes up from 10 per cent to 18 per cent.
London Stock Exchange chief executive Clara Furse, one of the best-paid women in the City, has transferred shares in the business to her husband - which will cut her tax bill by up to £400,000.
Mrs Furse, whose total pay and bonus package last year was worth £1.43 million, handed the £5.1 million worth of shares to husband Richard ahead of the weekend deadline.
By transferring her shares this week, Mrs Furse has ensured she will only pay a maximum 10 per cent, or £510,000, for the gains she has made on her shares. Next week she could have incurred 18 per cent or £918,000.
But her savings were dwarfed by those of Labour donor and former minister Lord Sainsbury. He shaved up to £27 million off his tax bill by transferring his £340 million stake in the supermarket giant to another company under his control earlier this week.
He said he would not personally benefit from the tax saving because he will devote the entire amount to charity. Brian Souter, founder and chief executive of rail and bus giant Stagecoach, also joined the list of company bosses cashing in their shares to avoid tax.
Mr Souter and his sister, Ann Gloag, will have saved themselves as much as £6.5 million in tax by transferring shares into trusts before the end of the tax year.
Famed for his deeply Christian and anti-homosexual views, Mr Souter transferred £54 million worth of shares to his wife today while his sister moved £11 million into a family trust.
Other sellers in the tax year-end rush have included Ken Clarke, the former Tory chancellor and now deputy chairman-of British American Tobacco. He sold his entire stake in the firm, worth £88,0000, shortly before the Budget.
Chris Wright, founder of the Chrysalis music group and backer of Wasps rugby club, saved up to £1.8 million this week when he transferred his 26 per cent stake in the business, worth £22.5 million, to his wife Janice.
And Sir John Chisholm, chairman of the privatised former government defence research business QinetiQ, transferred £17 million worth of shares into family trusts to cut his tax bill.
Debenhams chief executive Rob Templeman also transferred 250,000 sharesin the group to his wife yesterday. Outside the stock market, owners of private businesses have also rushed to do deals to reduce their tax bills.
Will Chase, founder of crisps company Tyrrells, has sold a stake to a private equity firm. Prêt a Manger founders Julian Metcalfe and Sinclair Beecham have also sold stakes in a £345 million deal while James Dyson, the vacuum cleaner tycoon, struck a deal to capitalise £150 million of his compan ownership.
The tax changes were originally drawn up by Chancellor Alistair Darling in an attempt to prevent private equity bosses avoiding tax. It followed one tycoon's admission that many private equity bosses paid a lower rate of tax than their cleaners.
Reader views (2)
Jeremy E, are you a banker perchance? Do you not think that it's reasonable that the rich should have to pay taxes like the rest of us?
- Iain, Covent Garden, 03/04/2008 11:13
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Caroline Furse has done more to make London the centre of the world's financial centre than the entire Cabinet put together. Brown and Darling's budget changes on Non-Doms and CGT were panic reactions, done on the back of a fag packet. Mrs Furse and others are clearly right to minimise their tax liability, particularly when this government is so inept at spending our money. The move on non-doms (no I am not a non-dom) will cost each and everyone of us a lot more in lost revenue, and make our industries less competitive, our arts scene poorer, and the UK a less attractive place to invest.
- Jeremy E, London UK, 02/04/2008 14:07
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