Cut to CGT exempt amount imminent

The current annual exemption for CGT is £12,300. However, for disposals made on or after 6 April 2023 the exemption is being slashed to £6,000. Worse still, it will be a meagre £3,000 from April 2024. The annual exemption is a wasting allowance - if you don’t use it, you lose it, so once the amount decreases there will be no way to utilise any unused amount from this year. Thankfully, with certain assets it's possible to plan disposals for efficiency. Probably the easiest assets to use for such planning are listed shares.

Assuming you have no other gains or losses to take account of, the simplest form of planning would be to look at the value of your shares each year and compare them to the historic cost. If you have at least some shares standing at a gain, you can sell just enough to realise gains of up to £12,300. This gives you tax-free cash. You can double the efficiency of this strategy by gifting some shares to a spouse or civil partner prior to them being sold. If you have an investment manager, check whether they already do this for you before making any transactions.

If you choose to utilise this strategy, don’t purchase shares in the same company within 30 days of selling them, as an anti-avoidance rule will make the planning ineffective. If you want to reinvest the gains, either wait until after 30 days, or choose a different but similar company to invest in.