PortfolioMetrix recently launched a new process that harvests Capital Gains in a portfolio to make use of the investor’s annual Capital Gains Tax (CGT) allowance, putting the money in the investor’s pocket instead of the taxman’s.
The process makes it easy for advisers to simply select which investor’s allowance is targeted and then PortfolioMetrix do the rest. For advisers, harvesting gains has historically been very time-consuming and, in some cases, complex to do. This has resulted in many investors – usually ones who have smaller levels of investment and who would really appreciate the saving – missing out.
This didn’t seem very fair to us so we set about finding a way to help advisers offer a CGT allowance harvesting service to all their clients where CGT is relevant, regardless of how much they have invested.
Through a blend of technical know-how and investment expertise (and several months of careful planning), we achieved our ambition and cracked the process, fully automating a previously laborious task for accessing the CGT allowance.
With a fairly generous tax allowance of £11,100 (rising to £11,300 this year) for Capital Gains, our process enables advisers to potentially save clients up to £2,220 each year – a saving that can be enough to significantly offset, or even completely cover, the costs of managing the client’s entire portfolio.
We also decided it might be helpful to put together a practical guide to CGT allowance harvesting for advisers who might otherwise have decided that, for the majority of their clients, it was just too time-consuming to try to claw back a tax saving on the allowance. Called CGT Allowance Harvesting: Use it or Lose it, it’s available as a free download at http://www.portfoliometrix.com/white-papers/cgt-allowance-harvesting-use-lose/.