Fresh analysis has found company directors of listed companies are racing to sell shares ahead of a widely anticipated capital gains tax raid in next week’s Autumn Budget.
Between 1 September and 22 October, the value of sell and buy transactions in directors of UK-listed companies in their own firm’s shares was £345.5m and £63m respectively, a steep increase on previous periods.
In the first quarter of this year—a longer reporting period—the value of sell-and-buy transactions by directors of London-listed companies was £315.5m and £218.4m, respectively.
The rapid rise in directors seeking to crystallise the gains they have made through owning equity reflects a wider pattern of investors jumping to pay capital gains tax (CGT) before the Budget in October.
Earlier this week, figures released by HM Revenue and Customs (HMRC) showed CGT receipts had jumped 16.4 per cent between July and September, up to £572m compared with £492m in the quarter in 2023.
Monthly CGT receipts in September – the closest month to the Budget – came in at £192m, the highest monthly figure recorded since at least 2008.
CGT receipts can be highly volatile, and the jump in receipts from the tax, which is applied to any profits made on investments in major asset classes like equities, commercial property and private equity, is likely to elicit a fall in receipts in the period that follows it.
Will Rhind, founder and chief executive of Graniteshares, who conducted the analysis, said: “Shares that are held outside of an [individual savings allowance] are subject to CGT on any profit made when you sell them.
“Everyone receives an annual CGT allowance of £3,000 but any gains above this can be subject to CGT.
“Our analysis shows speculation around a possible increase in CGT paid on any profit made on the sale of shares has led to an increase in the value of stock sold, and we expect this trend to continue in the run-up to next week’s Budget.”
Graniteshares’ findings echo several high profile director share deals that London-listed firms have disclosed recently.
Earlier this month, Greggs’ chief financial officer Richard Hutton and Balfour Beatty’s Phillip Harrison offloaded £1.85m and £1m worth of shares, respectively.