In the 2023/24 tax year, individuals are entitled to an annual Capital Gains Tax (CGT) exemption of £6,000, while trustees have a slightly lower exemption limit of £3,000. This exemption is a valuable tool for minimizing CGT liability on profits from asset sales or disposals.

If your investments have experienced substantial unrealized gains and you haven’t utilized your CGT exemption yet, it’s advisable to seek financial advice. There are strategies to make the most of your CGT exemption. For example, you could consider reinvesting gains into an Individual Savings Account (ISA), subject to ISA limits. Other options include reinvesting through a spouse or civil partner, or reinvesting into a similar type of investment. For further guidance and tailored advice, you can contact us at 07557 306356.

Asset transfer between spouses or civil partners before encashment is another strategy to optimize tax efficiency. Each partner can use their annual exempt amount, but it’s essential that such transfers are genuine and unconditional gifts.

Also, it’s crucial to evaluate whether any investments have incurred a loss. Balancing excess gains with any losses can optimize your tax position. Remember, losses can be carried forward indefinitely, so it’s important to include all gains, losses, and the annual exemption in your tax calculations to maximize your relief.

Please note that the information provided here is based on our current understanding of taxation legislation and regulations. However, tax levels, bases, and reliefs are subject to change.

It’s important to be aware that the Financial Conduct Authority (FCA) does not regulate Taxation advice. Therefore, it’s advisable to consult with a tax professional or financial advisor who specializes in this area to ensure compliance and optimal tax planning.