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Tax Reporting to Optimise Efficient Outcomes Considering Reduced CGT Exemption

Differentiate your service with FSL’s What-If analysis

The 2023 Spring Budget included CGT allowance changes likely to affect tax reporting and planning for many wealth managers. We expected some potential relief to offset the halving of annual CGT allowance from April (from £12,300 to £6,000). This didn’t happen. As it stands, an estimated quarter of a million extra people may be charged CGT next year. 

This will certainly increase pressure on financial advisors to present the most tax-efficient investment outcomes. Therefore, finding an effective solution is an excellent way to add value. 

There are many reasons why our CGiX software is the market leader. As the industry’s most accurate CGT calculator, there isn’t a more comprehensive option available. Considering the new CGT exemption amount, the software’s What-If functionality is particularly useful. With less room for manoeuvre, it tells you exactly what assets to sell to stay within the allowance. 

You will see the implications if you want to raise certain proceeds or choose to sell specific assets. Plus, the optimiser function shows you how to achieve the optimum position. You might want to explore selling a particular security to see if that would result in being under or over the allowance. You can also consider any future corporate actions that may cause you to exceed the CGT allowance. Whereas a higher threshold would probably have covered things like this, there is now a much smaller window. So, you need to be aware of all the potential consequences. 

Furthermore, it’s not just about making gains but also maximising the utilisation of any losses. With CGiX, you can factor everything into decision-making. And it lets you pinpoint exactly what to buy and sell and how to stay within the allowance. 

One of the reasons leading wealth management firms trust CGiX is its scope. It provides a broader spread of legislation rules than the average shares and securities. ERI and offshore reporting fund data is one area where it certainly adds value compared to standard platforms. Whereas profits on reporting funds are subject to capital gains tax rates, non-reporting funds are subject to income tax. As such, it strengthens your position to know whether selling out of an offshore fund might create an income tax or CGT liability. It is similar with deep discounted securities that could be taxed as income if you’re generating a gain. Ultimately, CGiX stands out for its in-depth level of legislation and classifications, making your tax reporting more accurate and efficient. 

Adding value to the service you provide clients is more important than ever, and having the most robust solution possible is crucial. Get in touch to find out more about how CGiX can benefit you