CGT Tax Year-End Planning: 7 Strategies Before 5 April 2027

Why CGT year-end planning matters more than ever

The CGT Annual Exempt Amount fell from £12,300 in 2022/23 to just £3,000 in 2024/25 — where it stays in 2026/27. Meanwhile, the dividend allowance dropped to £500. More investors than ever are bumping into CGT on ordinary investment accounts.

The AEA is strictly use-it-or-lose-it each 5 April. A basic-rate taxpayer who fails to use it pays 18% × £3,000 = £540 in unnecessary CGT. For a higher-rate taxpayer the cost is 24% × £3,000 = £720.

These seven strategies, applied thoughtfully before 5 April each year, can legally eliminate or defer significant CGT bills.

Strategy 1: Use the AEA every year — it is free money

The Annual Exempt Amount is a per-person, per-year allowance. You cannot bank unused portions — each April the clock resets to zero.

Action: review your General Investment Account holdings each March. Identify positions with an unrealised gain close to £3,000. Sell enough to crystallise roughly that amount. You pay zero CGT on the first £3,000 of net gains in any tax year.

Even if you immediately rebuy the same investment outside an ISA (after 30 days), you have reset your cost base to today's price — permanently reducing your future taxable gain.

Annual saving for someone who does this every year for 20 years: at 24% on £3,000 that is £720/year × 20 years = £14,400 of CGT avoided, entirely legally.

Strategy 2: Bed-and-ISA — shelter gains permanently

Bed-and-ISA means selling a gain-making investment from a GIA and using the proceeds to fund your ISA, then rebuying the same investment inside the ISA wrapper.

Why the 30-day rule does not apply: the anti-avoidance rule (TCGA 1992 s.106A) says that if you sell and rebuy the same shares within 30 days, the sale is matched to the repurchase. But the rebuy happens inside an ISA — which is a legally distinct owner. HMRC's CGT manual confirms this sidesteps the matching rule.

The benefit: future gains, dividends and interest on that investment become permanently tax-free. Over decades, this compounding tax-free benefit easily outweighs any immediate CGT cost of the initial sale.

Pacing strategy: if your unrealised gain is large (say £30,000), you can bed-and-ISA in tranches of £3,000 per year — crystallising zero CGT over ten years while moving the entire holding into the ISA wrapper.

Most major UK platforms (Hargreaves Lansdown, AJ Bell, Vanguard UK, Fidelity, Interactive Investor) have a dedicated "Bed and ISA" button.

Strategy 3: Bed-and-SIPP — pension relief on top

Bed-and-SIPP follows the same logic: sell from the GIA, contribute to a SIPP, and repurchase inside the pension wrapper. Because the pension is a legally distinct owner, the 30-day rule does not apply — and unlike a waiting-period rebuy, you can do this immediately.

The additional benefit versus bed-and-ISA: you receive pension tax relief on the contribution. A basic-rate taxpayer contributing £800 net receives £200 from HMRC — the contribution is grossed up to £1,000. A higher-rate taxpayer claims a further 20% via Self Assessment.

Note: the pension Annual Allowance (£60,000 in 2026/27) caps total pension contributions including employer contributions.

Strategy 4: Harvest losses to offset gains

If you have investments sitting on a paper loss, you can sell them before 5 April to create a "capital loss" that offsets gains elsewhere.

Rules:

• Losses in the same year are offset against gains before the AEA is applied.
• Any excess losses carry forward to future years — indefinitely.
• You must report losses to HMRC, even if no tax is due that year, to preserve the carry-forward right (4-year window to claim).

Practical example: your GIA portfolio has a £6,000 gain on Fund A and a £4,000 paper loss on Fund B. Crystallise both. Net gain = £2,000. Covered entirely by the £3,000 AEA. No CGT due.

If you still want exposure to Fund B, wait 30 days and rebuy in the same account (to avoid the bed-and-breakfasting rule), or rebuy immediately inside an ISA.

Strategy 5: Transfer assets to your spouse before selling

Transfers between spouses and civil partners are at no-gain/no-loss for CGT. No CGT arises on the transfer itself.

Why this matters:

• If your spouse has unused CGT AEA (£3,000) and you do not, transfer the asset to them, then they sell. The household saves up to 24% on £3,000 = £720.
• If your spouse is a basic-rate taxpayer and you are higher rate, transferring the asset before sale means the gain is taxed at 18% rather than 24% — a 6% saving.
• Combined household AEA: two people × £3,000 = £6,000 per year — enough to shelter significant annual portfolio rebalancing.

Mechanics: the transfer must be an outright gift or sale at arm's length. Keep records.

Strategy 6: Timing disposals around rate-band boundaries

Your CGT rate depends on whether the gain falls in the basic-rate band. The threshold for 2026/27 is income up to £50,270 before the higher rate begins.

Example: your earned income is £40,000 (£27,700 above the Personal Allowance). You have a capital gain of £30,000. The first £10,270 of the gain falls in the basic-rate band (18%), the remaining £19,730 at 24%.

If you can defer part of the sale to next tax year — perhaps after a salary reduction, maternity leave, or retirement — more of the gain may fall at 18%.

Conversely, if you expect to be a higher-rate taxpayer next year but are basic-rate this year, bringing forward the sale to use this year's lower rate saves money.

Strategy 7: Business Asset Disposal Relief — check eligibility before you sell

Business Asset Disposal Relief (BADR, formerly Entrepreneurs' Relief) applies a 18% CGT rate on qualifying business disposals, subject to a £1 million lifetime limit.

Qualifying disposals include:

• Sale of your own trading business (sole trader or partnership)
• Sale of shares in your own personal company (at least 5% shareholding, director for 2+ years, trading company)

Since BADR requires specific conditions to be met for at least 2 years before disposal, planning must happen well in advance. If you are approaching a business exit, take advice on whether BADR conditions are met and whether deferring or accelerating the sale changes the rate.

Since October 2024 the BADR rate is 18% (previously 10%). The lifetime limit remains £1 million.

A word on the October 2024 rate equalisation

The October 2024 Budget changed CGT rates significantly. Gains on all asset types — shares, funds, property, business assets — are now taxed at:

• 18% if the gain falls in the basic-rate band
• 24% if the gain falls in the higher or additional-rate band

The old distinction between residential property CGT rates (18%/28%) and other assets (10%/20%) is gone. Property sales and share sales now face the same rates.

Pre-April checklist

• Review all GIA holdings for unrealised gains and losses
• Identify holdings with gain close to £3,000 — crystallise to use AEA
• Identify holdings with paper losses — consider crystallising to offset other gains
• Check remaining ISA allowance — bed-and-ISA any large positions
• Review spouse's position — transfer before selling if their AEA or rate is lower
• Check if you have unclaimed losses from prior years — report via Self Assessment

Sources

• HMRC: Capital Gains Tax — gov.uk
• HMRC: CGT annual exempt amount — gov.uk
• HMRC: Business Asset Disposal Relief — gov.uk
• TCGA 1992, s.106A — the 30-day anti-avoidance matching rule
• HM Treasury: Autumn Budget 2024 — CGT rate changes