Skip to main content

Bure Valley Group is an investment introducer platform which links successful investors with exciting, innovative UK startups seeking funding. This content is for information purposes only and should not be taken as financial or investment advice. 

Capital gains tax (CGT) is one of the hidden eroders of investment returns. Fortunately, with a bit of careful planning, investors have a range of options available to help reduce unnecessary CGT on their profits. In this guide for 2021-22, our investment team at Bure Valley Group offers some ideas to help inspire you.

We hope you find this content useful. To find out more about our EIS and other investment opportunities, visit our portfolio page here. To enquire regarding our latest projects and funding (for investors and founders, respectively), you can reach us via:

+44 160 334 0827

 [email protected]


ISAs & allowances

For UK residents there are two great tools that can help mitigate a CGT bill. The first is your annual CGT allowance, which lets you generate up to £12,300 on profits from disposing assets (outside of an ISA, pension or tax-efficient scheme/vehicle) without attracting CGT. When the tax year ends, your CGT allowance “refreshes” – allowing you to make further gains efficiently.

The second tool is your ISA. In 2021-22, you can put up to £20,000 into your ISA(s) in a given tax year – including a Stocks & Shares ISA, or Innovative Finance ISA. Any capital gains that you generate within these “wrappers” will be tax-free. To mitigate CGT, therefore, a good place to start is to make maximum use of your annual ISA allowance. Over 10 years, for instance, this could allow you to “shield” £200,000 within an ISA portfolio; all free from CGT.

However, for investors with large portfolios, their ISA allowance is likely to be insufficient, on its own, to shield asset disposals from CGT. Here, it can help to use your CGT allowance shrewdly. For instance, some investors could keep most of their shares within an ISA, which could allow for more tax-efficient property sales – allowing up to £12,300 in capital gains to be made each tax year, free of CGT. Those in a marriage or civil partnership could also consider transferring some assets to the other person, to  leverage their unused CGT allowance for the year.



If you are looking to invest for your long-term future, pensions are amongst the most tax-efficient tools available to you. In 2021-22, an investor can contribute up to £40,000 into their pension(s) – or up to 100% of his/her annual earnings; whichever is lower. Not only will any capital gains be tax-free within your pension, but the UK government will also “top up” your contributions through tax relief, equivalent to your highest rate of income tax. 

The main restriction, of course, is that you cannot start withdrawing capital from a defined contribution pension until age 55 (rising to 57 in the not-too-distant future). So you need to be confident that you don’t need the money for a while, before committing to serious contributions. Incidentally, putting more into a pension can be a great way to mitigate income tax too. For instance, if you earn £60,000 per year and put, say, £5,000 into a pension, then only £5,000 becomes liable to the Higher Rate (40%), rather than £10,000. The £5,000 you put into your pension, moreover, gets a 40% boost from tax relief.


Tax-efficient investments

For high-net-worth individuals (HNIs) with a higher risk appetite and who have an interest in growing companies, a range of schemes exist which can offer CGT-efficient returns. Notably, the Enterprise Investment Scheme (EIS) allows investors to put capital into EIS-qualifying companies and receive gains on their shares without any CGT, provided these are held for at least three years. The same benefit is available to investors who hold shares in SEIS funds or companies for at least three years. For investors with VCTs in their portfolio (venture capital trusts), disposal relief is also likely due provided the UK government’s criteria are met.


Other methods

There are all sorts of exemptions in the UK tax system that can help an investor mitigate CGT. For instance, gains on possessions like collectibles and antiques (“chattels”) are often tax-free. Also, “wasting assets” – i.e. those with an expected lifespan of under 50 years – can be free of CGT provided they were not eligible for business capital allowances (e.g pleasure boats and antique cars). Certain chattels that are not classed as “wasting” may also have a different CGT position depending on how much they sell for. Paintings and jewellery sold for under £6,000 a piece may be exempt, for instance. Finally, there is also the option of giving land, property or qualifying shares to a charity – which typically provides relief on income tax and CGT.



CGT can be a challenging tax to mitigate. For those with complex finances, it can help to seek the help of a professional to guide you – such as a tax adviser or financial planner. Bear in mind that any action taken to try and reduce CGT is likely to impact your finances elsewhere, so it is important to look carefully at the whole picture before making any big decisions. 

Interested in finding out more about the exciting startup projects we have on offer to investors here at Bure Valley Group? Get in touch today to start a conversation with our team and discuss some of the great investment memorandums we have available here:

+44 160 334 0827

 [email protected]