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Have you utilised your exempt amount for capital gains tax purposes?

As we are approaching the end of the 2014-15 tax year, individuals who own assets that are subject to capital gains tax (CGT) may be advised to consider the comments made in this article.

If you dispose of a chargeable asset between 6 April 2014 and 5 April 2015 you are allowed gains of up to £11,000 tax free. If you have made no chargeable disposals in this period, but are considering a disposal after 5 April 2015, you may want to reconsider the timing of the disposal.

The £11,000 allowance cannot be carried forward. If you have no gains to cover with the allowance it is a permanent loss of tax relief.

This planning opportunity is especially useful if you have a portfolio of shares. If you are advised by your broker to consider the disposal of a holding it should be possible to time the disposal (perhaps selling some shares before 5 April 2015 and some afterwards) to maximise utilisation of the exempt allowance.

The utilisation of this allowance can be enhanced if you are sitting on potential capital losses. For example, you may own shares that will never recover from a recent drop in price – they have become of negligible value. A separate claim can be made for this sort of loss of value and in some cases it may be possible to set off losses against income rather than other capital gains.

The key to these and other tax planning strategy is to consider your options before 5 April 2015. As we have said before, on numerous occasions, once the tax year end date is passed, many allowances and reliefs may be permanently lost. Spending an hour or two with your tax advisor before 5 April may be the best investment you make this year...