The budget cut in capital gains tax (CGT) from 40 per cent to 20 per cent has saved four directors almost £1 million on CGT they would have paid on share options they exercised and subsequently sold as part of Bank of Ireland's takeover of New Ireland.

The four directors bought the shares at an option price of 250p on December 31st and immediately sold the new shares at Bank of Ireland's takeover price of £23.82 per share. The capital gain on each share sold to Bank of Ireland was £21.32.

New Ireland managing director Mr Jack Casey saved £540,000 in CGT as a result of the budget changes. He made a capital gain of £2.7 million on the sale and would have been liable to CGT of £1.08 million under the old rate. At the new CGT rate of 20 per cent, Mr Casey's tax bill is halved to £540,000.

Three other New Ireland directors made substantial gains on the sale of their share options. Company secretary Mr Giles Kerr made a gain of £479,700 while Mr Enda O'Brien and Mr Jim Gallivan each made a gain of £852,800.