It is vital to make use of both your own and your spouse's annual CGT exemption. In 2008-2009, the first £9,600 of each individual's gains are not taxed.
Example
Suppose you dispose of a number of assets during 2008-2009, making gains and losses (after indexation):
| Asset 1 - gain | £7,300 | |
| Asset 2 - gain | £1,500 | |
| Asset 3 - gain | £4,000 | |
| Asset 4 - loss | (£1,000) | |
| Net gain of assets | £11,800 | £11,800 |
| Annual exemption | (£9,600) | |
| Taxable gain | £2,200 |
The gain before using your annual exemption was £11,800. After the exemption it was just £2,200. For most people it is sensible to make enough sales in a tax year to realise gains which are covered by the annual exemption, because annual exemptions cannot be carried forward to future years. If you miss them, they're gone forever.
Of course, you may not actually want to sell the shares - you may regard them as a good long-term investment. There used to be a practice known as bed and breakfasting where people would sell shares on one day and immediately buy them back, the sole purpose being to realise gains.
Bed and breakfasting is no longer possible because of HMRC's "30 day rule" on sales and repurchase of the same securities (though as of 22nd March 2006, some non-residents of the UK may be exempt from this rule) but you can sell some shares and immediately have your ISA buy them back, or have your spouse or family trust buy them. Bear in mind the effect on taper relief: if you sell and your spouse buys, he or she will have to start all over again building up a three year period of ownership for taper relief from scratch.
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