May 2008

Tax Changes Create a Bonanza

West of England deal makers, Hazlewoods, faced an unprecedented race against time to complete a flood of sales and mergers ahead of the changes in the Capital Gains Tax regime coming into force. Thirty six business sales and acquisitions valued at £218 million were completed by Hazlewoods in the three months to 5 April as owners sought to beat the changes introduced by Alistair Darling on 5 April. Recently released figures from H M Revenue & Customs show how frenzied the rush was. The numbers show that in the last quarter of the 2007/08 tax year applications for Capital Gains Tax clearances for complicated arrangements surged by 57%.

Norman Webber, Head of Corporate Finance, commented, “We, like many others, have felt the affect of the deal frenzy which resulted in many late nights but we successfully achieved significant savings for clients. That said, we noticed a number of potential sellers chose to avoid the rush and concentrate on building value in their business and hopefully these deals will emerge in the not too distant future. A number of vendors who missed the 5 April deadline can still take advantage of the new entrepreneur relief effective from 6 April, which enables them to sell the business and potentially pay tax at 10% on the first £1 million.”

For further information on this press release, please contact:

Norman Webber                           Andrew Brookes
LLP Corporate Finance Partner      LLP Corporate Finance Partner
nlw@hazlewoods.co.uk                  ab@hazlewoods.co.uk