Consumers 'waste £150m on CGT per year'

Capital gains tax (CGT) makes up a significant portion of the tax paid unnecessarily by consumers each year, research suggests.

According to figures published by Unbiased, £148m of the £13.5bn paid needlessly each year relates to CGT.

Analysts at the adviser search engine say taxpayers are ignoring tax efficiency strategies and wasting millions on CGT every year.

Most people fail to use ISAs to shelter their investments from tax liabilities, Unbiased says.

"The easiest way to prevent unnecessary tax payments and reduce wastage to CGT is to visit an independent financial adviser who specialises in tax planning advice," said Karen Barrett (pictured), chief executive of Unbiased.

The CGT checklist

• The first £10,600 of capital gains for the 2011/12 tax year is exempt from tax. This limit applies to each individual - if you are married or in a civil partnership you each have an annual exemption and should ensure each of you maximise your CGT free gains.
• Bed and ISA option - a common form of CGT planning where investors sell investments or assets, use their annual CGT exemption and then buy the assets back within a tax-efficient ISA in the new tax year, thereby "washing" out the capital gains.
• Bed and spousing - investors sell their investments or assets, then their spouse or civil partner buy them back, which means the gain materialises for the seller and any future gain is in the spouse's name and both of the couple are utilising their annual CGT exemptions.