Best time to realise 2026/2027 CGT gains?

Aminatidi

I have a GIA containing unwrapped investments of around £150K in HSBC Global Strategy Balanced INC that I want to get wrapped over time.

I currently hold 63621 units with an average cost of 190p per unit.

This is what's left after realising gains to fully use my 2025/26 ISA allowance.

I assumed the optimal approach would be to do nothing right now and bed and ISA to use the full £3000 2026/27 CGT allowance by selling units from the GIA when the investing landscape improves.

However thinking a little more if I bed and ISA now I can sell more units and move more of the GIA to an ISA as I'd be buying right back in the 2026/27 ISA at depressed prices too.

Is this thinking sensible please i.e. sell at the start of the new tax year rather than wait so more gets shifted into the ISA wrapper?

masonic

It is most tax efficient to Bed & ISA at the lowest price possible. It is anyone's guess whether your fund will be lower in the next few weeks than it is later in the year. But it will not be at an all-time high, which is something.

leosayer

The right decision can only be determined with hindsight. A major crash could happen next month, or the biggest rally ever seen, or something in between. Market timing is not something most would suggest you do.

However, you bought the fund expecting growth so why not bed and ISA as soon as possible?

masonic

"However, you bought the fund expecting growth so why bed and ISA as soon as possible?"

Presumably the answer to this is so that more of that growth happens without an associated tax liability.

Aminatidi

I'm certainly not trying to "market time".

But on the broad principle that investments should go up over time (why else do we do this 😀) it was slightly counter-intuitive that for realising gains and wanting to get that GIA wrapped as soon as possible (predominantly ISA but SIPP is also there) there seems a good case that you actually benefit from selling at depressed prices assuming you're buying back in at roughly the same price but within a wrapper?

leosayer

https://forums.moneysavingexpert.com/discussion/comment/81949691#Comment_81949691

I missed an important "not" from my post which I have now edited.

DRS1

OP If realising a gain of £3k or just under leaves you short of the £20k ISA contribution limit what will you do? Leave the ISA only part filled or make it up from cash or sell more units? If you go for the last one then you want the price at the time of the bed & ISA to be as low as possible so you can get as many units as possible into the ISA at the least amount of CGT.

talexuser

My spreadsheet for the GIA has extra columns with the latest prices used to calculate the number of units required for a gain of 3k and the total sale proceeds compared to 20k. I can see at once what can be sold and decide where rebalancing kills 2 birds with one stone. Therefore I always sell as soon after April 6 as I can under normal circumstances and don't bother trying to time the market. Get the tax free stuff growing as soon as possible, CGT exemption limits are under strain and might be reduced further given the state of the country.

Aminatidi

Thanks so it sounds like I am indeed better off realising the gains earlier than later in the tax year.

Takes a bit of getting used to as it feels counter-intuitive - or it did to me - but the difference between the amount I could sell last tax year between when I did my initial calculation v once the war had had a slight impact was still very noticeable on units/amount sold v average price.

First time I've made enough gains for it to be an issue and I now have a SIPP to wrap money in excess of the ISA allowance so I think there's a real priority to try to get the GIA wrapped as much as possible.

tigerspill

I intend to move my GIA funds to ISAs immediately in the new year to utilise our CGT allowances.

Aminatidi

Messed up slightly as I didn't actually expect the unit value to be higher today than on Thursday yet it was.

So I've realised £3095 worth of gains.

I see HMRC have an online reporting service and I've zero issue paying tax on that £95 of gains but I do have to ask are they really expecting me to report this?

I find it slightly bizarre that there are people up and down the country probably making a living off eBay and Vinted and car boot sales but here's me doing all this over £20 worth of tax.