Chartered financial planner Martin Bamford says some clients may have been subjected to "poor advice" if they had been encouraged to realise gains ahead of today's lower-than-forecast CGT hike.
Higher-rate taxpayers will face a 10% hike in the rate at which they pay CGT, Chancellor George Osborne announced today.
From midnight tonight, the rate at which the tax is charged will increase from 18% to 28% for higher earners.
Here is what Martin Bamford, of Informed Choice, had to say:
"The CGT increase is certainly better than expected. We were concerned it might have been back-dated to the start of the tax year, or that taper relief would be re-introduced, but none of those things happened, so it could have been a lot worse.
"When we are advising clients, a simple CGT system is very welcome. My message to clients is it's very much business as usual. There was speculation about so many changes on CGT but all that has happened is we have seen a 10% increase for higher-rate taxpayers.
"There were rumours the CGT exemption, currently £10,100, would come down dramatically - even to as low as £2,500. But that, too, hasn't happened so I would say to clients: ‘It is best to manage your gains wisely, to phase them to use that exemption each year'.
"There really was no need to rush to realise gains, as some people may have done. I even had a phone call this morning from a client asking what to do in light of some of the CGT speculation. I told him there was no need for a knee-jerk reaction and to wait and see what happened.
"You should only realise gains when you need to. The old adage remains: ‘do not let the tax tail wag the investment dog.' No doubt some clients were advised to realise gains ahead of today's Budget. That may very well have been poor advice."
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