CGT planning & tax efficient investments

The tax year end offers a good chance to review investments and conduct a spring clean of any portfolios with careful consideration placed upon the following points.

The annual CGT allowance cannot be carried forward to the next tax year so it often makes sense to take any gains on investments within your annual exemption limit. For any assets showing a substantial gain, it may be desirable to crystalise some gains in this tax year and defer remaining gains to future tax years. Note that any decision to sell or to delay the sale of assets should be driven by investment concerns for which you may wish to contact a financial adviser.

You may also wish to consider that any asset transfers between spouses living together are not liable for CGT and are treated as acquisitions at the asset’s original price. This can help couples to make use of joint annual allowances.

Aside from regular investments, there are a number of tax-efficient assets which you may wish to consider as a part of your overall diversified portfolio, for example: ISA’s, Premium Bonds and National Savings. If you are concerned about high income tax payments or have crystalised large capital gains, tax efficient investments such as EIS and SEIS schemes may be appropriate for tax deferral, including gains made in the previous 3 years. However, when considering these more specialist investments, it is important to consider taking financial and tax advice.

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