Use it or lose it: We each have a £12,300 annual capital gains tax allowance. If you have made profits on investments that will likely get caught by CGT then it may be worthwhile ‘bed and breakfasting’ them i.e. selling them today and buying back 31 days later (you used to be able to buy back the next day) within any capital gains tax exemption each year. This may mean none or reduced CGT if you sell assets and buy them back every year, within tax free allowances.
Don’t forget that you can make unlimited transfers between spouses without triggering a capital gains tax event, so make sure all your investments are in the right names for tax efficiency.
Losses – make sure you record and document capital losses with HMRC as losses can be carried forward indefinitely. You may already have made losses in the past that could be offset against gains this year (provided they are in the same tax schedule e.g. you cannot offset capital losses on property against gains made in shares).
Make sure your property ownership is in the right place.
We are expecting huge changes in capital gains taxes and possibly a wealth tax next year. Would you rather pay capital gains tax at 10% and 20% this year or at income tax rates next year?
Don’t wait, get some early tax year end planning done now. Contact us.