Barry Foster looks at the tax rules surrounding CGT and which wrapper provides the most protection...
The capital gains tax (CGT) annual exemption reduced from £6,000 to £3,000 from 6 April 2024. That's a significant drop from the £12,300 exemption in place just two years ago. And for trusts it has fallen to just £1,500. To put this in some context, an investment of £60,000 growing at 5% capital growth would achieve a £3,000 capital gain if crystallised. So what is the value of the CGT annual exemption? Well of course it isn't £3,000 it is the amount of tax you would save by not paying tax on that £3,000 of gain. If you would be liable to CGT @ 20% the annual exemption is worth £60...
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