CGT delay 'will create false Aim market'

News Article - 23 May 2012
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There will be a surge of shares sold at bargain prices if the chancellor continues to delay changes to the capital gains tax (CGT) regime, it has been reported.

According to the Daily Telegraph, a spokesman for stockbroker Brewin Dolphin has explained that investors in small businesses listed on the Aim market are delaying their share-related decisions until Alistair Darling makes his announcement.

He then claimed that should the government decide to increase the flat CGT rate to 18 per cent, there will be a "massive sell-off" before the April 5th implementation date.

"Aim is illiquid and we feel there is a danger that this will concertina up into a very short period," he said. "It would be creating a false market as people sell out purely for tax reasons."

The company states that 50 per cent of individual-held shares of the Aim companies it advises will be affected by the proposed abolition of taper relief which will increase investor pressures.

On Wednesday, Richard Lambert, director-general of the Confederation of British Industry, told the government that the delay was causing "enormous damage" to its reputation.

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