View more on these topics

Pre-X highlights benefit of CGT changes to advisers

IFAs could offer their clients a significant saving on their investment should they choose to invest down the EIS route, that’s according to pre-IPO investment specialist Pre-X Capital Management.

Thanks to both legislative changes and the CGT deferral available down the EIS route, clients will only have to pay the new 18 per cent flat-rate on capital gains once they have completed the deferral period.

Gains which are not qualified for business taper relief are currently subject to an effective tax rate of 24 to 40 per cent, however, as outlined in the pre-Budget report in October 2007, this is set to change at the outset of the new tax year in April 2008.

For example, should a client have a £1m gain which has a CGT charge of 40 per cent (£400,000). CGT is deferred through an appropriate Enterprise Investment Scheme (EIS) product. On a subsequent sale of the EIS shares, by which time the new legislation is active, the gain would crystallise with a CGT bill of £180,000, a saving of up to £220,000. There is no limit on the amount of gain which may be deferred.

An EIS scheme must be held for a minimum of three years in order to be eligible for the CGT benefits.

Pre-X director John Blowers says: “IFAs should make the most of this as it provides a significant opportunity for their clients who have made a capital gain over the last three years and would like to pay significantly less tax.

“EIS allows reduction in this capital gain by over half in certain circumstances. Plus, clients can gain access to an exciting investment opportunity by investing in an EIS qualifying company – or more prudently – a managed EIS Fund.”


Pro planners taking on wealth managers

Top-end advisers are making steady inroads into client business which has previously been the domain of private banking institutions, says Transact.Head of marketing Malcolm Murray says professional financial planners are now offering a service to compete with private wealth managers.Murray says the development is a result of growing professionalism and firms are compete more for […]

Battle fatigue

Do readers believe providers have any obligation to honour policy conditions, adhere to their published service standards or recognise IFA complaints?


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm