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Tony Tax
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 15658
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Tony I have a portfolio of 100000 which i purchased for 25000

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I have a portfolio of 100000 which i purchased for 25000 5 years ago. What is the most tax efficient way to cash them in to pay some of my mortgage off?

What does the portfolio consist of, shares, property, other investments? What rate of income tax do you pay?
Customer: replied 3 years ago.


All shares.

I am on the limit of being a 40% taxpayer.
I have recently put them as a joint account with my wife.

My wife is on the limit too.




Can you tell me what the inherent gain is please.

Ignore my previous post.

I'm drafting an answer now.
Hi again.

You would probably both be paying CGT at 28% on the gains if you liquidated the portfolio in one tax year give that you are borderline 40% income tax payers.

Given that the portfolio is in joint names, you are each sitting on gains of £37,500. If you realised those now, the first £10,900 for each of you would be tax free so that would leave £26,600 chargeable at 28%. You would each have a CGT liability of £7,448.

There aren't many tax planning opportunities for this type of situation I'm afraid. You might consider liquidating half the portfolio in the current tax year and half in the 2014/15 tax year which starts on 6 April 2014. Assuming the overall gains were still £37,500 for each of you and you were still 40% taxpayers, you would each reduce your overall CGT exposure by £3,052 each by utilising an additional CGT exemption (£10,900 x 28%). However, you risk a stock market correction the longer you wait.

If you could contrive to reduce your incomes by about £27,000 each you would pay CGT at 18% on your gains but unless you run your own business and are able to control what you earn, that idea probably isn't viable.

I hope this helps but let me know if you have any further questions.
Customer: replied 3 years ago.


many thanks.

I have my own business and we take dividends as well up to 40K a year.

Will this affect your last reply?

I will not ask anymore.

And send you positive feedback and the money.



Ask as many questions as you like.

You clearly have a limited company as you take dividends. Take a look here for information on how dividends are taxed.

In the current tax year, assuming you have no salary, you could take up to £37,305 in dividends, profits allowing, and pay no personal tax. The £37,305 grosses up to £41,450 which is the sum of the personal allowance of £9,440 and the 20% tax band of £32,010. Dividends are treated as basic rate tax paid.

If you can reduce your income to around £14,500 gross in 2013/14, after deduction of the personal allowance of £9,440, you will have about £26,950 of the 20% tax band left which would mean your taxable gains of £26,600 would be taxed at 18% instead of 28%.

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