- Funds been building stakes in GKN and could make millions if bought by Melrose
- Labour MP Jack Dromey urged the Prime Minister to examine the shares
- Thought many are acting as middlemen who are exempt from stamp duty
MPs have demanded an investigation into whether hedge funds cashing in on the £8.1billion takeover of GKN are avoiding tax on their shares.
The funds have been building large stakes in GKN and are set to make millions if it is bought by Melrose.
However, it is thought many are trading via banks acting as middlemen who can be legally exempted from stamp duty – meaning they may not pay the tax. Labour MP Jack Dromey urged the Prime Minister during parliamentary questions: ‘Disturbing evidence has come to light of a hedge fund scam to buy shares in GKN while avoiding paying tax on shares.
MPs have demanded an investigation into whether hedge funds cashing in on the £8.1billion takeover of GKN are avoiding tax on their shares
‘Will she [the Prime Minister] agree to condemn this outrageous practice and investigate as a matter of urgency?’ Mr Dromey and Tory MP Jeremy Lefroy have also written directly to HMRC chief Jon Thompson, asking him to investigate.
In their letter they say: ‘The fate of GKN could well be decided by a group of predatory short-term investors who have no interest in the stainability of the business.
‘There are now reports that these same short-term funds will make this decision without paying stamp duty on their shares. At the very least, this appears to be against the spirit, if not the letter, of the law.’