Capital Gains Tax: End-of-tax-year planning to help you reduce your bill

Your investment portfolio is a key part of your financial plan, which allows you to grow your wealth steadily over time. Those investments might provide an income in the form of dividends. Alternatively, you may sell some investments and free up wealth to fund your retirement or other important financial goals.

If you hold those investments outside an ISA, it’s important to consider the Capital Gains Tax (CGT) you could pay on any profits you make from the sale. You might pay CGT when selling other assets too, such as artworks or second properties.

A large tax bill could diminish your returns and, after recent changes to the CGT rules, you could pay more than you previously would have. Fortunately, as the end of the tax year approaches on 5 April, you have an opportunity to make strategic sales and potentially mitigate CGT.

Read on to learn how.

You pay Capital Gains Tax on profits that exceed £3,000 when selling qualifying assets

CGT is a levy on profits you earn from selling or transferring ownership of certain assets. This includes:

Stocks and shares outside an ISA
A property that isn’t your main home
Business assets
Personal possessions worth more than £6,000 (excluding your car).

It’s important to note that it is only the profits, not the total value of the sale, that you may pay tax on.

Also, as of 2025/26, you have an Annual Exempt Amount of £3,000, and any profits that fall within this amount are tax-free. This threshold resets at the start of each tax year and you can’t carry it forward to future years.

Gains that exceed your Annual Exempt Amount are subject to CGT at a rate of:

18% for basic-rate taxpayers
24% for higher- and additional-rate taxpayers.

With this in mind, you may want to think carefully about selling assets.

Changes to Capital Gains Tax rules in recent years could mean you pay more

It is important to consider CGT because, in recent years, the government has introduced several significant changes to the rules around the tax.

The Annual Exempt Amount was reduced multiple times, first from £12,300 to £6,000, then again to £3,000. This reduced the gains you could earn without paying CGT.

Further to this, in her 2024 Budget, chancellor Rachel Reeves increased the rates of CGT from 10% to 18% for basic-rate taxpayers and 20% to 24% for higher- and additional-rate taxpayers, with immediate effect.

Spreading sales across several tax years could be an effective way to reduce Capital Gains Tax

There are several ways you could shield your gains from tax. For instance, you don’t pay Income Tax, Dividend Tax, or CGT on investments held in a Stocks and Shares ISA. However, if you’ve already used your ISA allowance for the year, you may purchase additional investments outside this tax wrapper.

You might also have other assets that attract CGT.

If you’re planning to sell qualifying assets soon, you may want to consider spreading the sale across multiple tax years to make more effective use of your Annual Exempt Amount.

For instance, imagine if you purchased some non-ISA shares for £10,000 and later sold them for £15,000, you would make a profit of £5,000. This would push you over your Annual Exempt Amount of £3,000, meaning you pay tax on the remaining £2,000.

As a higher- or additional-rate taxpayer, this would leave you with a bill of £480.

However, if you sold half of the shares in the current tax year and the other half in the following tax year, after 5 April, you would only make gains of £2,500 in each year. Provided you didn’t make any other gains, you would remain within your Annual Exempt Amount and wouldn’t pay CGT.

Even if you do exceed your Annual Exempt Amount, spreading the sale across several tax years can help you reduce the CGT you pay.

As the end of the tax year approaches, you may want to consider how you could be more strategic with your tax-free CGT allowance.

You also have unique planning opportunities if you are married or in a civil partnership

Splitting sales across tax years is not the only way to make efficient use of your Annual Exempt Amount if you are married or in a civil partnership.

You can pass assets to a spouse or civil partner without CGT. If they later sell the asset, they could pay CGT. The gain is calculated in the same way as it normally would be, but takes into account the price you paid for an asset and the amount your spouse or civil partner sells it for.

Although this means they might pay some CGT, they have their own Annual Exempt Amount to use.

Using the previous example, instead of selling all the shares yourself and making gains of £5,000, you could pass half to your spouse or civil partner to sell. This would mean you each made gains of £2,500, so neither of you would pay CGT.

Combining this strategy with carefully planned sales across several tax years could significantly reduce your CGT liability. However, planning of this kind can be very complex, so you may want to seek professional advice first.

Get in touch

We can explore the most suitable ways to reduce CGT with you.

Please contact us at hello@ardentuk.com or call or WhatsApp us on 01904 655 330. As an award-winning financial advice company with advisers included in the 2025 VouchedFor Top Rated guide, we can assure you that we’re a bona fide company providing excellent advice and high-quality service.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate tax planning.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.