Speculation has been rife over what the Burnham-led government means for UK tax policy. It’s therefore triggering many investors to ask the familiar question: What can I do before the 2026 Autumn Budget?
Further damaging tax changes are possible under Andy Burnham’s leadership, sparking widespread uncertainty for investors fearing changes around capital gains tax (CGT). While drastic action off the back of speculation is not warranted, you can take steps now to utilise existing tax allowances.
How do General Investment Accounts operate?
Unlike an ISA or pension, a General Investment Account (GIA) does not provide a tax shelter. Any gains made when selling investments may be subject to CGT, while dividends received could also create an income tax liability once annual allowances have been exceeded. Therefore, GIAs are considered a go-to option for those who exceed their annual ISA and pension allowances. Top CGT rates have often been above the current level over the past 60 years (see graph below).
Concern: The CGT allowance has already reduced from £12,300 to £3,000 in recent years. This could be slashed even further, or CGT rates potentially equalised with income tax rates. So what are your next steps?
Review your position
First, you should review any unrealised gains within your investment portfolio. Let’s say an investor originally put £40,000 into a fund that has grown to £70,000, resulting in a £30,000 uplift.
A steady approach to selling investments gradually over several tax years may allow gains to be realised more efficiently, rather than settling a larger tax bill in one go. If appropriate, they could opt for moving investments into an ISA (known as the “Bed and ISA” process), ultimately making future growth and income tax-free.
Tip: Married couples/civil partners could also benefit from transferring investments between themselves, enabling both parties to optimise their available CGT allowance and reduce the overall household tax bill.
Why you shouldn’t delay action
One of the biggest investor mistakes? Delaying action, because this ultimately limits the financial planning options available to you. Assessing unrealised gains, considering how to optimise tax-efficient wrappers and planning for future investment disposals can all reduce your long-term CGT exposure.
Let’s say you have a portfolio containing significant unrealised gains. You may find that reacting to tax changes after they’ve been implemented may simply be too late, limiting the options available to manage your position calmly and efficiently.
Instead, by reviewing your holdings in advance, you could have the option to spread disposals over multiple tax years, use available allowances, or move suitable investments into tax-efficient accounts gradually.
Avoid knee-jerk reactions
Taking a proactive approach does not mean making unnecessary changes or reacting to every headline. Instead, it means understanding your current position, reviewing the options available and ensuring your investment strategy remains aligned with your financial objectives.
With tax policy firmly in the spotlight, it’s easy to make ad hoc short-term decisions without a full understanding of how they impact your own long-term financial goals. The cost of getting it wrong, however, can be significant, and speaking with a Financial Consultant adds real value to your portfolio by helping you avoid costly missteps.
[i] With the Autumn Budget just weeks away, get in touch with a Financial Consultant near you for a free, no-obligation consultation to start understanding your GIA and CGT position. Contact one of our Financial Consultants on 03300 564 446 or get in touch via our contact form.
This article is for general information purposes only and does not constitute financial advice or a personal recommendation. Past performance is not a reliable indicator of future results. Investments can rise or fall in value, and you may receive less than you originally invested. Tax treatment depends on individual circumstances and may change in the future.
