An opportunity to limit tax

Crystallising losses could work to your advantage

The current economic climate could offer an opportunity for people to limit their tax bills and crystallise losses by turning them to their advantage and passing on share portfolios and property to children to help avoid capital gains tax (CGT).

Gifts from parents to children usually incur CGT if they have risen in value, but no tax is levied if the value falls, meaning families are able to give away second homes and shares without having to pay tax.

If your profits have fallen below the CGT allowance or fallen into negative territory, crystallising them could reduce your tax bill.

If you have made a capital loss on your share portfolio, this can generally be carried forward indefinitely to offset against future gains, however, you must notify HM Revenue & Customs of losses within five years.