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Calculator illustrates effect of CGT change

Hargreaves Lansdown has introduced a new online capital gains tax calculator ahead of forthcoming reforms.

The calculator is designed to show clients how they will be affected by the changes from April 6. The company is also publishing a free tax savings guide.

From April 6, CGT will change to a flat rate of 18 per cent while indexation and taper relief are abolished.

Head of financial practitioners Danny Cox says: “The changes to CGT will mean that some investors will be better off cashing in now whereas others should wait until the new tax year. The CGT calculator will help investors to make their own decisions.

“The change to CGT has been launched as part of a long-term simplification of the tax system and to increase tax revenue on the profits made in private equity investing. For normal investments in shares, unit trusts or buy to let, the move is generally negative for basic-rate taxpayers and positive for higher-rate taxpayers.”

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