PortfolioMetrix has launched its automated Capital Gains Tax (CGT) allowance harvesting process, significantly reducing the time it typically takes advisers to capture the permitted tax breaks for clients.
Historically, due to the time-consuming nature of calculating and achieving CGT reductions, advisers have tended to offer CGT harvesting only to high net worth clients.
Being fully automated, the PortfolioMetrix CGT allowance harvesting process does all the analysis and trading meaning advisers can focus on other time consuming tax year end tasks safe in the knowledge the portfolios remain in line with the target asset allocation, whilst capturing more of their clients’ tax allowances.
Mike Roberts, Managing Director of PortfolioMetrix UK comments: “The UK’s annual CGT allowance is extremely generous at £11,100 per person, increasing this year to £11,300 but it is a “use it or lose it” deal. Most advisers would love to provide the service to all their clients as it is such a tangible value-add, but while the complexities of the method are not high for a single investor, the ability to repeat the process for every client can be prohibitively time consuming, especially on an advisory basis. Some advisers have a good go at it but it’s probably fair to say they would usually file CGT allowance harvesting quite a long way down the priorities list.”
By harvesting CGT allowances efficiently advisers could save clients up to £2,220 each year if the right amount of gain can be released from the client’s portfolio, an amount that is particularly significant for smaller investors who, generally, are not currently being offered CGT harvesting as a service. This is a shame as the saving can be enough to significantly offset, or even completely cover, the costs of managing the client’s entire portfolio.
To assist advisers in understanding the opportunities and restrictions involved in CGT harvesting, PortfolioMetrix has produced a free guide entitled CGT Allowance Harvesting: Use it or Lose it. To download the guide click here.