CGT changes prompt investors to shift strategy

A recent survey of over 2,000 UK investors revealed that the recent changes to capital gains tax (CGT) has caused people to reassess their investment portfolios.

The research, undertaken by Censuswide on behalf of The Royal Mint, found that over half of investors said the new rule changes would prompt them to create a fresh wealth plan in order to secure their current and future investment gains.

Of those that had taken steps to prepare for the changes, the survey found that nearly a third had reviewed their investment to assess their risks. Meanwhile, another 36% had consulted a specialist tax adviser to receive advice and increase their portfolio’s resilience.

Strategy shift

On April 6, the tax-free allowance for capital gains halved to £3,000 from £6,000. The higher rate of CGT charged on property disposals reduced from 28% to 24%.

As a result of the changes, The Royal Mint said that investors are increasingly looking to find solutions and strategies to mitigate future tax liabilities.

Its research found that half of UK investors are now motivated to invest in CGT-exempt investments, while an additional 30% are actively restructuring their investment portfolio to avoid being impacted by the changes in CGT.

CGT-exempt investments

There are a number of assets that don’t get caught by the CGT net. Some of the most common include gifts to UK charities, prizes and winnings from betting, and your main property. Gold, silver, and platinum bullion are also exempt.

Following the recent tax changes, Andrew Dickey, The Royal Mint’s director of Precious Metals,  said gold was becoming a “go-to” investment. The Royal Mint reported seeing a record number of customers buying bullion via its website during 2023.

“Whether investors are looking to capitalise on the CGT-exemption for bullion coins or looking to grow their portfolio with a safe-haven asset, gold is becoming a go-to investment for many with tax risk and wealth building on their mind,” Dickey said, adding that it was important for investors to explore avenues that allow them to protect their investment gains.