Advisers are increasingly looking for support with mitigating the shrinking capital gains tax allowances, according to one technology firm.
Data from Financial Software found advisers are putting increased importance on CGT tools when choosing a platform.
The CGT annual allowance will fall to £3,000 in April 2024, after it fell to £6,000 last year.
The Lang Cat's analyser software has shown from more than 1,000 due diligence exercises carried out by advisers, ‘CGT tools’ was the fourth highest must have functionality option out of 600 others.
Coming in above the CGT tools were vital features of having a general investment account, Isa and flexi-access drawdown.
The Lang Cat said this suggests CGT tools are the number one extra feature that sets a platform apart from its competitors.
Michael Edwards, managing director of FSL said: “The data shows that CGT tools are now an essential for any platform and those without this functionality risk being excluded from due diligence platform shortlists.
“One thing we know from working with advisers is that they need simple and accurate solutions to support what can be highly complex scenarios. This is more timely than ever, given persisting pressures on the personal allowance."
The change this spring to CGT allowances follows a drop in the personal allowance in 2023 from £12,300 per year to £6,000.
The Office for Budget Responsibility expects CGT receipts to hit £19.5bn in 2024-25.
Edwards added: "Scenario planning tools enable advisers to share clear illustrations outlining the impact of a range of transactions on client portfolios, including potential CGT liabilities.
"It arms them with the information they need to recommend the best possible strategies, such as the timing of asset sales or alternative forms of ownership, and make sure clients can make informed decisions.”
tara.o'connor@ft.com
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