Ross Leckridge, financial planner and associate director at Johnston Carmichael, suggests a potential solution: “For gains in excess of the annual exemption, consider, where possible, multiple disposals over multiple tax years.
“This works for assets made up of many constituent parts, like shares, unit trusts and Oeics, but not for large singular assets, like property.”
Married couples also have the opportunity to pay less CGT.
For instance, they can make use of the inter-spousal exemption, as Mr Leckridge points out: “The inter-spousal exemption allows assets to be transferred between spouses without creating a chargeable gain.
“This can allow married couples to offset two annual CGT exemptions against large gains to reduce the total CGT payable.”
Possible changes ahead
>“A potential scrapping of higher rate tax relief on pensions has repeatedly reared its head since George Osborne commissioned a consultation into the future of pensions tax relief .--Gary Smith
Looking ahead, are there any rumoured changes to allowances for next year that people should take into account when planning for this year?
Perhaps the most widely reported rumour in circulation pre-Budget is that the new chancellor of the exchequer, Rishi Sunak (pictured), intends to cut the current 40 per cent pension tax relief for higher earners, reducing this to the flat rate of 20 per cent that applies to basic rate taxpayers.
Gary Smith, financial planner at Tilney, wonders if this could be the inevitable direction of travel, given previous government research on pensions.
He says: “A potential scrapping of higher rate tax relief on pensions has repeatedly reared its head since George Osborne commissioned a consultation into the future of pensions tax relief during his tenure as chancellor.
“A new government with a commanding majority may well feel it is in a position to implement such a policy.”
While the move to slash the level of relief now appears to have become less likely, given opposition from Mr. Sunak’s colleagues, Budget proposals are still a work in progress.
Pensions or IHT?
But should clients be paying particular attention to their pension contributions?
Some advisers believe that it might make sense for people to take pre-Budget action, if appropriate, as Ms Boyle observes: “Every Budget there are rumours about changes to pension allowances or the rate of relief.
“These seem to be louder this year. If pension contributions are part of the plan, it is probably worth making them before the Budget.”