CGT Modelling & Optimisation

When combining abundant and generous taper relief on gains with losses from a market downturn (for both business assets and employee share schemes), it is important to consider the CGT implications of proposed disposals as part of the fund management process.

WhatIf CGT modelling provides an insight into where losses can be effectively used without losing taper relief. CGT WhatIf can, in some cases, help build scenarios that restore, create or maximize taper relief where previously this relief would have been lost or unavailable.

Identifying where losses can and have been offset, whilst ascertaining where and when taper relief anniversaries lie can make a big difference to the net performance of a portfolio.

CGT WhatIf should be an integrated part of the modelling / asset allocation process and, where possible, be integrated into a specialist software solution that targets this area.

The main consideration of a fund manager is asset allocation, but the CGT consequences of any asset movements can influence allocation decisions. Where there are multiple acquisitions and disposals, the assessment of CGT implications is highly complex. Optimizing the CGT impact within defined criteria adds a powerful aspect to the CGT WhatIf process.

In all cases, effective CGT computations should be 'real time' and based on the most up to date corporate event information possible. When calculating proceeds, the significance of a real time price feed is dependent upon accurate cost adjustment (after a corporate event) taking place.

Where CGT WhatIf is an integrated part of the asset allocation / modelling process, interfaces between systems must provide access to the full power and functionality of the CGT 'What-if' whilst providing performance through fast response time and data throughput where CGT enquiry volumes are high.