As a 65-year-old investor with over 40 years of experience, Gareth is looking to simplify his £1.1mn portfolio spread over 33 holdings in a general investment account. With unrealised gains of about £790,000, Gareth is considering the potential capital gains tax (CGT) implications of reorganizing his investments for easier management as he ages.

Ian Futcher, a chartered financial planning consultant at Quilter, advises Gareth to carefully consider his options when it comes to CGT. While paying tax on gains may seem like a drawback, it ultimately stems from successful investments. Ian emphasizes the importance of not letting tax considerations overshadow long-term financial objectives.

Gareth’s decision to simplify his portfolio and incur a CGT bill depends on whether the current holdings align with his goals and risk tolerance. By assessing the performance of his investments and considering the broader implications for his estate, including a significant inheritance tax (IHT) bill, Gareth can make an informed choice.

In addition to his general investment account, Gareth’s Isa, cash, and other assets bring his total worth close to £5mn, highlighting the potential impact of IHT. While Gareth is hesitant about enterprise investment schemes (EISs), Ian suggests considering the benefits of EISs in deferring CGT and reducing IHT liabilities through investments in high-risk companies.

EISs offer tax incentives, including upfront income tax relief and CGT deferral, making them attractive options for tax-efficient investing. However, the risks associated with investing in smaller companies should be carefully weighed against the potential tax benefits.

Ultimately, Gareth should prioritize his financial goals and explore all available options, including trusts and insurance policies, to optimize his portfolio for both tax efficiency and long-term growth. By carefully evaluating his priorities and seeking professional advice, Gareth can make informed decisions to secure his financial future.