Stampede of the entrepreneurs by Anthony Hilton, London Evening Standard

Normally this time of year would be taken up with auditing the
accountants of clients with a December 31 year end, and sending out
reminders to personal clients to use up their personal allowances, SIPPs,
ISAs and so on.

This year though he has been rushed off his feet by people trying to sell
out. He claims, and says it is without exaggeration, that perhaps a
quarter of his corporate clients - and inevitably it is the brightest and
most successful quarter - have put their businesses up for sale, or rushed
through a transaction. None of these had displayed any desire to sell
out until last autumn when Chancellor Alistair Darling announced his
capital gains tax reform.

The prospect of the near doubling of capital gains tax from 10 % to 18% for entrepreneurs is what has sent them rushing
for the exit. Darling has caused a whole generation of entrepreneurs to
lose heart.

The capital gains changes have got a bit lost amid all the railing about
non doms, but the reality is that they will probably do as much damage by
the time they have run their course. This is not just because of the mass
abandonment of business by those selling out but also because no one
seems to have thought through what will happen when it becomes established
that the top rate of capital gains tax at 18% is so much lower than the top
rate of income tax at 40%.

I am old enough to remember when Nigel Lawson
unified the two tax bands and regarded it as one of his most worthwhile
achievements because it put a stop to all manner of artificial
transactions designed to convert income into capital gain for tax
purposes. Now they will all start again.

The supreme idiocy of Darling's so called capital gains tax reform is that it creates the opportunity and
incentive for serious artificial tax avoidance where none previously existed.