Looming CGT changes 'increase business deals'

News Article - 27 December 2007
Category: Business

The number of mergers and acquisitions (M&A) has doubled, according to a Scottish law firm.

Lindsays, based in Edinburgh, told the Scotsman that the increase in firms selling up is due to the impending changes to capital gains tax (CGT).

Following proposals by the chancellor that CGT be reduced to a flat rate of 18 per cent and that taper relief be abolished, business owners are intending to complete the sale of their company before the changes are introduced on April 6th.

William McIntosh, corporate partner at Lindsays, said: "Since the chancellor's announcement, we have had many clients looking to complete company or business sales and management buyouts before the new regime takes effect."

There seems to be double the number of deals taking place compared to last year, he added.

Following the news that the chancellor's decision on CGT would be delayed until the second week of 2008, Penny Bates, tax partner at Menzies chartered accountants, claimed that such a delay would not benefit business owners.

She told the BBC that such a delay is not giving firms enough time to react to the changes.

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