New Statesman Scotland
The Chancellor has cut capital gains tax down to a modest 10 per cent for anyone who holds their shares in a venture for four years. This has already diverted several companies, about to seek a full market listing, to switch instead to the junior stock exchange - the AIM market.
Dobbies Garden Centres, based in Edinburgh, is the third-largest operator in Britain of the most popular way to spend weekends in the suburbs - buying shrubs and garden gnomes and mooching around the displays.
Dobbies was to seek a stock exchange listing in June, but Brown's new tax regime makes AIM seem a better prospect. The Scottish company reports that the Scots have become much more enthusiastic about gardening as the wave of new television programmes on green-fingered skills captured the imaginations of so many.
The attraction of the new CGT dispensation is that it makes investing in smaller firms far more attractive to individuals than large financial institutions. Small investors tend to be more loyal, too.
The new lighter taxation of capital is something Tory chancellors seemed frightened to do, as they would be caricatured as favouring the wealthy. Gordon Brown seems to have appreciated the truly wealthy have their resources offshore. It was only modest savers that were being penalised.
Dobbies is the first listed company to say, after the Budget, that it does not need to seek a full market listing. Its decision may anticipate a quiet revolution in which young ventures can seek capital. James Barnes, chief executive of Dobbies, admitted that he was baffled. "None of us expected a Labour Treasury team to relax the long-established punishment of the fairly innocent habit of saving."
Gordon Hart, a policy-holder with Scottish Provident, thought his bonus declaration was on the mean side. He concluded he should seek to demutualise the venerable Edinburgh savings club and convert it to a plc. Hart reckoned he, and the 400,000 other policy-holders, would get about £2,000 each.
He seems to have triggered an auction that leaves his modest bid overwhelmed by international money-machines, which quite fancy gobbling up Scottish Provident. The Dutch group Aegon, which recently acquired Scottish Equitable, is tipped as a likely winner. If an intense struggle is sustained, Hart may get more than double his money.
Scottish Provident is a tiny operation compared to Standard Life, but if it were to fall to the demutualisers, it too is likely to convert to a plc.
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