reducing CGT liability

[Aldos Army]

Is this a legit way of reducing future CGT exposure?

I have recently come into the fortunate situation where I find myself maxing my ISA each year so end up putting some extra into a general account. Obviously, I am aware that the money invested in the general account will be liable to CGT in the future when I retire (I'm probably going to save into that for the next 10-15 years).

Assuming I use vanguard general account is it possible to "crystalise" any gains each year by switching to a similar fund - so for eg selling up "developed world" and switch to "all-world". Use the £3k allowance and pay and CGT owed at that point. Then swapping each year to mop up the 3k allowance?

Is there any pitfalls to doing this which would mean just leaving it as it is for 10-15 years?

[PoorCarCollector]

See '30 day rule', you're ok if selling and then buying a different fund

It's quite possible the current £3k CGT allowance may become zero after the budget, so IMHO best to wait to see what that brings in October

[Aldos Army]

I wasn't too sure how "different" the fund had to be, but yes you're right might as well wait for the budget.

[Mr Whippy]

I wonder if they’ll try the idea of charging gains on a valued yearly basis… despite trying to encourage investment.

Their entire position is a juxtaposition. They want more revenue from wealth/savings, but want more investment from them too.

[Panamax]

Aldos Army said:

I wasn't too sure how "different" the fund had to be, but yes you're right might as well wait for the budget.

Doesn't have to be very different at all. For instance, switching from Fidelty European Fund to Schroders European Fund which may be almost identical is definitely a CGT disposal.

What doesn't count is, for instance, switching from Class W to Class Z of the same fund, or switching from "Income" to "Accumulation" units of the same fund. Those sorts of changes don't amount to disposals for CGT purposes.

[Aldos Army]

Panamax said:

Doesn't have to be very different at all. For instance, switching from Fidelty European Fund to Schroders European Fund which may be almost identical is definitely a CGT disposal.

What doesn't count is, for instance, switching from Class W to Class Z of the same fund, or switching from "Income" to "Accumulation" units of the same fund. Those sorts of changes don't amount to disposals for CGT purposes.

useful info, many thanks