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SEI predicts wave of business from CGT concession

Scottish Equitable International is predicting an influx of capital into the personal investment market as new business tax rules come into effect on April 6.

The new rules mean that individuals disposing of shares in their own company could pay lower amounts of capital gains tax.

SEI says the combination of improving stockmarkets and high-profile company failures will prompt many people to take advantage of the new rules by selling shares in their own company or the company they work for.

The changes, which allow the shareholders to qualify for maximum taper relief earlier, were announced by Chancellor Gordon Brown in the 1998 Budget but will only take full effect from April 6.

Technical manager Margaret Jago says maximum business taper relief means that a 40 per cent taxpayer will actually pay tax on any gains at a rate of 10 per cent.

Head of sales for international products Richard Leeson says: “The recent spate of high-profile corporate failures, such as Enron and Marconi, has highlighted the need for investors to diversify away from just one company.

“IFAs should be considering a move to a broader investment but also one which provides tax advantages, as these investors have managed to reduce the level of tax paid on their gains.

“This is the type of opportunity which can be enhanced by strong professional connections between IFAs and accountants, who will be well placed to cross-refer clients in this situation.”

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