CGT support becomes adviser ‘must have’ amid shrinking personal allowances 

by | Mar 26, 2024

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Advisers are placing increasing importance on support with CGT from platforms as they research the most effective providers, analysis from FSL (Financial Software Ltd) has shown. This comes as more investors are drawn into CGT scope as personal allowances continue to shrink.  

Data from the lang cat’s Analyser software, shows that from over 1000 due diligence exercises carried out by advisers, ‘CGT tools’ was the 4th highest ‘must have’ functionality option out of 600 others. However, this sits below the vital hygiene features of having a GIA, ISA, and Flexi-Access drawdown, suggesting CGT tools are the number one ‘extra feature’ that sets a platform apart from its competitors. 

This comes as the latest forecasts from the OBR1,  show CGT receipts are expected to surge to £19.5 billion in 2024-25 following last year’s reduction in the Personal Allowance from £12,300 per year to £6,000. Given the imminent changes that will see the allowance halve again to £3,000 for the coming tax year, the expectation is that CGT receipts will increase further still. With more investors hit, accurate CGT support is likely to become even more important. 

 
 

Commenting on the data, Michael Edwards, MD, FSL said: “The data shows that CGT tools are now an essential for any platform and those without this functionality risk being excluded from due diligence platform shortlists.  

“One thing we know from working with advisers is that they need simple and accurate solutions to support what can be highly complex scenarios. This is more timely than ever, given persisting pressures on the Personal Allowance.  

“Scenario planning tools enable advisers to share clear illustrations outlining the impact of a range of transactions on client portfolios, including potential CGT liabilities. It arms them with the information they need to recommend the best possible strategies, such as the timing of asset sales or alternative forms of ownership, and make sure clients can make informed decisions.” 

 
 

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