Can I ask how others treat CGT in client portfolios? Do you just rebalance a portfolio back to the model and accept that the tax is simply the tax (whether you use the allowance or not/ or even go well over) or do people attempt to target  the 11k allowance each year and if so, how do you approach what to sell?

Example: Current client has 39k unrealised  gains. Her next review will be in next tax year. A rebalance now would capture about 7k of that gain. Should i be looking to increase this to 11k but thereby going outside of our model portfolio or just be happy with 7k.

Her husband is in a different position (c58k unrealized and rebalance would take him over the 11k allowance) 

What would you do?


  • The saying goes to never let the tax tail wag the investment dog (or something along those lines) especially given CGT rates are so favourable at the moment - therefore, if the rebalance only uses 7k of her allowance so be it, you want the client to be aligned to your investment committee's thinking. If the reverse was true and it'd use more than her allowance, i'd say the same thing. For the husband, that may well mean having some CGT to pay (is he higher rate income tax or will some of it be at 10%?) It's difficult to know the true CGT liability without having a good prediction of all the clients' other income for the entire tax year. Pension contributions could also help keep tax at 10%. 

    Alternatively, can you not pass some of the husbands account to his wife and let her realise a further 4k of allowance by working out a rebalance to that level? Depending on the provider, that can be fairly straightforward otherwise it might be a bit of manual calculation on Excel.

    Lots of possibilities!

    Late to the party but looking to launch a new platform due diligence tool and consultancy business later this year - watch this space and feel free to message if you would like any initial info.

  • Thanks Jamie - the old tax tail/dog motto is something we try to live by. I just wanted to check other views. The adviser I work for is very much of your viewpoint and having thrashed it out again, the tax saving on a few k missed is only a few  hundred £ thanks
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