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Seven ways to reduce your capital gains tax bill

Investors are wasting money by not making enough use of several strategies to reduce capital gains tax
Seven ways to reduce your capital gains tax bill

All investors want to make capital gains, but if your investments are held outside tax wrappers such as individual savings accounts or self-invested personal pensions, a gain can come with a hefty tax bill. Unfortunately, many investors are not making enough use of tax efficient strategies and allowances available to them.

Figures from the 2013 unbiased.co.uk/TaxCalc Tax Action research show that UK taxpayers could be wasting as much as £171m in unnecessary capital gains tax (CGT) payments this tax year. This represents a rise in CGT waste from 2012 of £38 million.

CGT is a charge that arises from the disposal of assets that have increased in value. This tax does not apply on the sale of your primary residence or your car, but gains made on the sale of shares or buy-to-let properties as well as some other kinds of assets are taxable. Each UK taxpayer has an annual CGT free allowance, which for the 2012/2013 tax year currently stands at £10,600.

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