Lord Wolfson has sold a £29m stake amid impending capital gains tax reforms by Rachel Reeves.
- The sale involved 290,000 shares, reducing his holding from 1.4 million shares.
- The timing coincides with speculation about CGT being aligned with income tax in the upcoming budget.
- Investors, anticipating changes, have been swiftly offloading assets contributing to record CGT receipts.
- Next’s share price has surged 123% since October 2022, boosting company performance.
Lord Wolfson, a Conservative peer, disposed of 290,000 shares between Friday and Tuesday, representing a £29.2 million stake. Prior to this transaction, Wolfson held approximately 1.4 million shares in Next, accounting for a 1.2% stake valued around £141 million. The company has refrained from commenting on this significant sale.
The development comes at a time when speculation is rife regarding potential changes to capital gains tax (CGT). Rachel Reeves is expected to address CGT in her forthcoming Budget, potentially aligning it with income tax rates. Presently, higher earners pay up to 45% on income but are liable for CGT rates of 20% for shares and 24% on property gains. Basic-rate taxpayers face lower rates of 10% and 18%, respectively.
There has been a notable trend of investors hurrying to sell off assets before any prospective changes take effect. Duncan Mitchell-Innes of TWM Solicitors commented on the situation, stating, “With many expecting CGT increases, we’ve seen a surge in asset sales in recent weeks.” In August alone, HMRC received a record £197 million in CGT receipts, the highest recorded for the month since 2008, as landlords and investors anticipate the impending tax adjustments.
Lord Wolfson’s recent divestment is his third reduction in shareholding, now retaining a stake valued at approximately £100 million. This move follows a notable rally in Next’s share price, which has climbed by 123% since October 2022. This impressive performance has set Next apart from many of its competitors, bolstered by several profit revisions.
Earlier this September, Next increased its profit expectations by £15 million, predicting pre-tax profits nearing £1 billion, a figure sustained by growing international sales. The company attributes its success to the alignment of global fashion trends, driven by popular culture and streaming platforms like Netflix and TikTok.
The strategic sale by Lord Wolfson underscores the market’s adaptive strategies in response to anticipated fiscal policies.
