Buy-outs surge in sales rush
THE VALUE of buy-outs involving UK firms is set to top £5bn in the first three months of 2008, experts said today.
The surge came despite dearer financing costs in the credit crunch, as owners look to sell before higher tax rates come into force in April, the Centre for Management Buy-Out Research said. It contrasts with a 60% decline in deal-making activity during the final quarter of 2007, according to the body, which is based at Nottingham University.
Chancellor Alistair Darling’s controversial changes to capital gains tax next month set a flat rate of 18% for those selling businesses.
This ends so-called “taper relief” where the tax paid on the sale of businesses owned for more than two years is as low as 10%.
Despite an entrepreneurs’ relief of 10%, the bid to avoid the new regime has encouraged a rush of deals.
