Advisers are overhauling their financial planning strategies to combat the continued reductions to Capital Gains Tax thresholds over the past three years.
New research by Financial Software Limited (FSL) shows the vast majority of advice firms have adjusted their approach, with just 11% saying they have made no changes.
More than half (57%) of advisers report increasing joint planning between spouses to maximise the use of both individuals’ allowances, making it the most common response to the lower thresholds. Half (50%) are placing greater emphasis on ensuring clients fully utilise ISA and pension allowances, while 31% are increasing their use of loss-offsetting strategies.
The firm said around six in ten advisers say they are now recommending fewer General Investment Accounts, while 29% advise clients to defer asset sales and 19% are increasing the use of CGT-efficient investments such as VCTs, EIS and gilts. Nearly a fifth (18%) are also encouraging greater use of gifting strategies.
The annual CGT exemption has fallen sharply from £12,300 in 2022/23 to £3,000 in 2024/25, bringing an additional 87,000 taxpayers into scope. Over the same period, FSL’s research shows the proportion of advisers’ own clients affected has doubled to 37%.
Despite CGT planning becoming more embedded in routine client reviews, the research highlighted gaps in platform functionality. While 62% say the support they receive from platforms is sufficient, 16% say they provide limited or no CGT calculators and 11% cite a lack of scenario-planning tools. In addition, 2% report insufficient educational or CGT resources more broadly.
Michael Edwards, MD, Financial Software Limited said: “CGT is no longer a peripheral issue for advisers or their clients. With more individuals drawn into scope, tax planning has moved centre stage. Advisers are reworking financial plans and making far greater use of tax-efficient structures, which demands accurate data and robust modelling tools.
“CGT planning is inherently complex, so platforms must ensure they provide meaningful support. Doing so not only helps advisers deliver better outcomes but also supports their obligations under Consumer Duty, helping clients avoid foreseeable harm such as unexpected tax liabilities.”
He added that platforms that offer only basic functionality “risk falling behind in an environment where advisers need holistic oversight and precision to prevent costly mistakes.”
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