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Daily Insurance Industry News
Tuesday 17th of July 2018
November 20, 2007

Swinton Sets Aside £100 million for Acquisitions

by Stewart Douglas

Story link: Swinton Sets Aside £100 million for Acquisitions

Swinton Sets Aside £100 million for Acquisitions

Insurer Swinton has today announced it is to ringfence some £100 million in order to fund direct acquisitions from within its dedicated takeover team within the coming twelve months, as part of its ongoing ambition to extend the range of its broker reach.

The leading insurance broker said that they would separate the funds for the specific purpose of investing in other insurance brokers and ancillary service providers, which is has said today will be one of its major goals over the coming months, particularly in light of an imminent change in the tax regime.

Swinton are hoping to capitalise on the predicted mass-offload of business assets in the run up to April 2008 which will see sweeping reforms of capital gains tax which is likely to present an increased number of buying opportunities for those looking to invest, and the £100 million earmarked today should be sufficient to provide some capital for the investment window.

Capital gains tax is the charge arising on capital income from the disposal of assets. At present, for businesses, assets held for longer than 2 years would be chargeable at just 10 of any gain as a result of a generous relief known as Business Asset Taper relief, designed to counteract the impact of inflation in calculating capital gains.

However as of April next year Capital Gains tax will be chargeable at a flat rate 18%, thus incurring substantially increased tax liability for those intending to dispose of assets after April 2008. As a result, Swinton have anticipated companies with holdings to look to sell in the run up to the period to save on future tax liabilities, which it hopes will present suitable investment opportunities in the near future.

The move is another component part of Swinton’s ongoing growth strategy, which has seen it acquire in excess of £50 million in GWP revenues over the course of this year so far.

Speaking today on the move Hazel Walker from the Swinton acquisitions division said that the underlying legal shift will impact the industry as much as any other, which the company is hoping should present certain viable long term investment opportunities.

 

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