By ADRIAN LOWCOCK 14/05/2010
With the expectation that capital gains tax (CGT) is going to rise to a rate much closer to that of income tax, we look at five simple steps investors can take to minimise their CGT bill.
- Wrap as much of your investment portfolio as possible into ISAs. With the full allowance at £10,200 most people will be able to put a large proportion of their investments into ISAs.
- Each person has an allowance of £10,100 in gains before any tax is charged, so many people can avoid paying the tax by strategically selling assets in different tax years.
- If you have any losses not utilised in previous years, you can carry these forward and offset them against new gains – however, you will need to declare these losses with the Inland Revenue.
- Transfer assets into your spouse’s name. Transfers between married couples are not deemed a sale, so the original cost and gain is transferred across. This allows you to use both allowances of £10,100 to maximise your CGT exemptions.
- Invest in CGT exempt products. Gains on venture capital trusts (VCTs) are not subject to CGT.