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Use or lose...

2 March 2017

1 min read

Use or lose your annual capital gains allowance

An often overlooked allowance is your annual Capital Gains Tax allowance.

Matt Lewis
Matt Lewis,

Chartered Financial Planner

If you have investments held outside a pension or ISA, these will usually be subject to capital gains tax (CGT) when they are sold or given to someone other than your spouse. The gain is usually calculated as the sale proceeds less purchase cost and is taxable at 10% (basic rate taxpayers) or 20% (higher and additional rate taxpayers) except for residential property, where the rates are 18% & 28%.

Everyone has an annual tax-free allowance, currently £11,300. Gains up to this amount can be realised tax-free; if an asset is held jointly with a spouse, both can use their annual exemption against the gain, effectively doubling the tax-free amount.

Every year, review your investments to see if it’s worth realising gains.

If your exemption is not used each year, it is lost. If you have an investment portfolio, it makes sense to realise some profit each year to make use of your capital gains allowance, particularly if you have holdings that have grown significantly in value over time. This can reduce the future tax due and allows you to take some of the profits made to date.

Until recently you were able to sell an investment and buy it back the next day, a process called ‘bed & breakfasting’. This is no longer allowed, but you can sell an investment and buy it back through your ISA.

Matt Lewis

Matt Lewis


Chartered Financial Planner

Matt has been part of the EQ team since 2015 as a Financial Planner. He is recognised as a Chartered Financial Planner and holds the Investment Management Certificate. Over the last 10 years Matt has been advising private clients on a holistic basis, taking into account their investment, retirement and protection needs. He believes that an extremely high level of knowledge of financial planning is essential to ensure that the best level of service can be received by his clients. Outside of work Matt enjoys sport, being a regular skier, runner and triathlete. He has completed various marathons and the Wales Ironman Triathlon.

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