The Capital Gains Tax (CGT) allowance for 2024/25 has been further reduced to £3,000, down from £6,000 in 2023/24 and £12,300 in 2022/23. This steep decline over recent years means that CGT is now a more significant consideration for investors than before. While the allowance still provides a tax-free threshold for gains, it is far less generous than in the past, making tax planning even more crucial.

If you’ve made gains above this threshold, consider:

  • Selling assets gradually over multiple tax years to stay within the reduced allowance.
  • Offsetting losses against gains to reduce your taxable amount.
  • Using tax-efficient wrappers such as ISAs (Individual Savings Accounts) or pensions to shelter investments from CGT.

For those holding significant gains, transferring assets between spouses or civil partners (who don’t pay tax on transfers) could help spread gains across two allowances, effectively doubling the tax-free threshold.

While the CGT allowance is no longer as beneficial as in previous years, strategic planning remains essential to minimise tax liabilities and maximise returns.

Find Out More

With tax rules tightening and allowances shrinking, now is the time to review your capital gains and ensure it’s as tax-efficient as possible.

Before the 5th April 2025 deadline, consider consulting a financial adviser to help structure your finances effectively and avoid unnecessary tax burdens.

More information on CGT can be found here.

If you would like to discuss anything mentioned in this article, please contact us

See the other topics in our Bitesize Tax Planning series:
Personal Reliefs
Planning for Retirement
Savings & Investments
Employee Benefits
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Personal circumstances differ and not all of this information is applicable to every client and/or their business, this information is general in nature and should not be relied upon without seeking specific professional financial advice.

The Financial Conduct Authority (FCA) does not regulate tax advice, estate planning, trusts or will writing.

The content in this article is for your general information and use only and is not intended to address your particular requirements. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice.

Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles.

Thresholds, percentage rates and tax legislation may change in subsequent finance acts. Levels and bases of, and reliefs from, taxation are subject to change and their value depends on the individual circumstances of the investor. The value of your investments can go down as well as up and you may get back less than you invested. Past performance is not a reliable indicator of future results.

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