LABOUR PEER 'AVOIDED £27M TAX BILL'

The move will save the Labour peer and donor more than £27 million by avoiding impending controversial changes to the capital gains tax (CGT) regime, according to experts quoted by the Daily Telegraph.

The former science minister transferred 92 million shares he owns personally to a company he controls called Innotech Advisers, the paper reported.

This allows him to pay CGT at the lower rate of 10% before it rises to a flat rate of 18% on Sunday - £34 million compared to the £61.2 million he would be taxed if he sold the shares next week.

Lord Sainsbury will not himself profit from transferring the shares and intends to use the money for charitable donations, his spokesman said.

The spokesman said: "This will maintain the status quo and allow Lord Sainsbury to continue his current pace of his grant giving to charity."

In October, Chancellor Alistair Darling announced he would abolish the taper relief which allowed companies to pay CGT at a rate as low as 10% and instead impose a flat rate of 18% for gains over £1 million.