Chancellor Rishi Sunak’s announcement, in July, that there is to a review of capital gains tax (CGT) has put the topic front-of-mind for many of our clients.

Even before the Chancellor’s announcement, we had been anticipating future changes to UK taxation. There had been growing press speculation that taxes would rise to help the government pay the bill for combatting the Covid-19 pandemic and the economic consequences of lockdown.

We saw similar theorising in the run-up to the 2019 election.  At that time, many of our clients took the pre-election speculation as an opportunity to crystallise some large capital gains, primarily to hedge the risk of a Labour-led Government.

Now, there will be an increasing number of people who consider the probability of continued 10%/20% CGT rates to be highly unlikely.  This might prompt a desire to undertake other financial planning, such as gifting (as I do not for one moment think that inheritance tax is going to be immune from any future tax changes!), or it might just provide an opportune moment to readjust portfolios to help with diversification, or income.

I’m not advocating that every client with capital gains should crystallise them.  This announcement does, however, present an opportunity to review this with our clients and reassess the position.

For people with CGT concerns, the approach will be different from person to person.  The right course of action will very much depend on your personal and financial circumstances, together with attitudes to risk and the timescales of other planning (such as gifts).  Financial advice when considering CGT issues is of key importance.

It pays to get advice. Whether you are looking to invest for the first time, or have an investment portfolio already, if you don’t know where to begin, or know exactly what you are looking for, we can help. Contact your local Investec experts in Liverpool today, to discover how we can help you to fulfil your financial goals, and live life the way you want to.

To contact or read more about Peter Allen, visit his biography here.