Matthew Stephens, head of product and sales technical at Prudential, explains how to overcome limitations of the capital gains tax annual exemption.
The annual exempt amount is a powerful weapon in the armoury of Capital Gains Tax (CGT) planning but on its own it can have its limitations. It is a “use it or lose it” exemption. The first £10,600 (2011/12 tax year) of realised gains is exempt from CGT but if you do not realise gains, and use the exemption, in a tax year it is not possible to carry forward any unused exemption to a later tax year. If you are sitting with a portfolio of assets with significant gains the exemption will not, therefore, allow you to take out all of the money immediately without a CGT liability. It can ta...
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