The Capital Gains Tax (CGT) changes by the Chancellor George Osborne have left some Independent Financial Advisers (IFA) red-faced.

Some financial advisers who recommended that clients realise capital gains ahead of the predicted large hike in CGT at the emergency budget are under fire for possibly issuing ‘bad advice’.


During the lead up to the budget financial advisers were split over how to deal with the projected rise, which may have been to as high as 40% or even 50%. Coupled with a possible drop in the annual allowance from £10,100 to as little as £2,000 it was understandable that many people thought they had much to lose. It would be further understandable that advisers would also worry and advise as they saw fit.

Many of those advisers that told their clients to keep their money where it was are now criticising the advisers that told their clients to sell up and realise gains.

In a report in the Professional Adviser Martin Bamford of Informed Choice says “There was no need to rush to realise gains, as some people have. The old adage remains: ‘do not let the tax tail wag the investment dog’.”

Where people were looking to take gains anyway and had a large portfolio then this would not be an issue. But many it appears had smaller portfolios and may have ended up selling when there was no real need to.

But what should be remembered by all is that IFAs do not have crystal balls and whichever way the tax axe had cut would have left some of them open to criticism.

As for the investors if they hold on to assets hoping they will accrue in value then they should be prepared to gamble not only with the market the asset is in but also with the Treasury.

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