Tory treasurer in shares tax probe
CONSERVATIVE Party treasurer Michael Spencer is at the centre of an embarrassing enquiry by tax officials over the transfer of shares in his City trading company Icap to an offshore subsidiary.
HM Revenue & Customs has queried the “tax base cost” of Icap shares transferred to Dutch subsidiary Incap Netherlands BV in 2001 by Spencer’s private investment company IPGL.
The matter relates to Spencer’s own valuation of the shares. No tax was paid at the time but the valuation is crucial to the amount of any future capital gains tax owed.
HMRC declined to comment. A spokesman for IPGL insisted the matter — revealed in accounts posted at Companies House — was an “enquiry not a formal investigation”.
Spencer is a close personal friend of Tory leader David Cameron and is overseeing the party’s finances as it gears up to fight an election campaign.
It has been a tumultuous year for 53-year-old Spencer, once known as the City’s richest man. He lost the tag of billionaire after his personal wealth fell £250 million to £900 million as the market value of Icap almost halved to £2.2 billion this year.
In February he stepped down as chairman of stockbroker Numis just weeks after admitting to secretly pledging £15 million in Numis shares — 12 per cent of the company — as collateral against a loan to IPGL.
He also recently separated from wife Lorraine after 25 years of marriage before being linked to society beauty Sarah, Marchioness of Milford Haven.
Disclosure of his latest headache was forced by tougher accounting rules. Directors said: “The company is in discussion with HM Revenue & Customs in relation to the tax base cost of shares in Icap Plc (previously Garban Intercapital Plc) that were transferred at market value to a fellow subsidiary.”
They said Icap had recently obtained an independent tax valuation, which backs its base cost assumptions. T
hese have also been “confirmed to be in order by leading Tax Counsel”. The company said it had made no provision to fight future possible action by HMRC.
An IPGL spokesman said: “At the time Revenue accepted the valuation. More recently it has asked for more information.”
The value of Icap, an inter-dealer broker that handles nearly $700 billion (£460 billion) in trades a day, plunged from £4.5 billion to £2.2 billion during the credit crunch.
Spencer, who owns 20 per cent of Icap, has been forced to refinance IPGL’s debts with a £200 million loan from HSBC.
