Hargreaves Lansdown have advised clients to put investments in tax shelters such as ISAs and SIPPs.

Hargreaves Lansdown have advised clients to put investments in tax shelters such as ISAs and SIPPs.

• Use your capital gains tax allowance each year. Between you and your spouse you can realise profits of up to £20,200 this tax year. One of the easiest ways to do this is by using Bed & ISA.

• If you’re considering realising large gains at some stage (selling buy-to-let property, for example, or restructuring a portfolio) you might consider doing it now to beat any rise in CGT in the emergency Budget.

• If married, move your investments into the name of the person who pays the lowest rate of tax. If the expected changes to CGT emerge, basic rate taxpayers are likely to pay CGT at around 20% whereas higher rate taxpayers could pay 40%.

• Delay taking profits until a new tax year when you can use another year’s CGT allowance. This does run the risk of a reduction in the CGT allowance and a possible rise in the rate of CGT paid

• Place existing investments in tax shelters such as ISAs and SIPPs. Venture capital trusts are another tax-efficient investment which more experienced investors could consider.

• Consider investing in funds such as unit trusts rather than individual shares. CGT is only paid when gains are realised by an individual investor. Share dealing by a fund manager within a unit trust does not incur CGT. This also applies to multi-manager funds where the buying and selling of funds by a fund manager within a multi-manager fund does not incur CGT.

• Consider investments which are not subject to CGT. After an ISA and a pension, these include gilts and national savings products.

• Consider offshore investment bonds. These investments start to look more attractive once you have used your ISA allowance and regularly use your CGT allowance
  
  

• Minimise your income tax. Assuming CGT is re-linked to income, reducing your taxable income could help minimise the capital gains tax you pay. This includes holding income-bearing investments in an ISA and holding investments in the name of the spouse who pays the least tax.

• If CGT rates rise, clever use of a pension contribution could reduce your liability. Pension contributions increase the amount of income you can receive before you start to pay higher rate tax. Remember though, once invested you cannot access your money until retirement (from age 55).