Arm chief helps cut tax bill with £350,000 donation of shares

Sir robin Saxby, chairman of the chip design company Arm Holdings, has sold about £1m worth of shares in the business and has gifted a further £350,000 worth of stock – a move that should help lower his tax bill.

Sir Robin sold 1.63 million shares in Arm at an average price of 61.38p, raising him about £1m but has also exercised options over 600,000 shares and donated the stock to the University of Liverpool.

Exercising the options would have cost Sir Robin £12,000, since they were priced at 2p each. Had he kept the stock, he would have made an instant paper profit of about £338,000 based on last night's closing price.

Instead, by gifting the shares – worth about £350,000 – rather than selling them and then gifting the cash, Sir Robin avoids capital gains tax on the transaction. The value of the stock is also then allowed for offset against his income tax bill.

It is the second time in just over a year that he has made such a donation. In February of last year, he sold 667,00 shares at an average price of about £3 but transferred 167,000 shares, then worth about £500,000, to the University of Liverpool.

He is not alone in taking advantage of the tax break – introduced during Gordon Brown's Budget in April 2000 – covering donations of shares to charity.

Nick Leslau, one of the entrepreneurs behind Knutsford – the shell company once tipped to buy Marks & Spencer or J Sainsbury, gifted £280,000 worth of stock to the British Wheelchair Sports Foundation in May 2000.

The donation was made at a time when shares in Knutsford were suspended at 80p each and meant Mr Leslau was entitled to offset the full value of the transfer – £280,000 – against his income tax for that year even though the stock collapsed when trading resumed.

Sir Robin's latest share sale and donation leaves him with just over 24 million shares in Arm Holdings, equivalent to a 2.35 per cent stake worth about £14m at yesterday's closing price.

It also comes just six months after Arm issued a profit warning which wiped about 60 per cent off the value of the stock in a day, sending it crashing to 46.75p.

Last night, shares in ARM closed down 3 per cent, or 1.75p, at 58.25p. Sir Robin's option to buy the 600,000 shares was due to expire in June.