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You can deduct the expenses of buying and selling, although these are likely to be zero in your case. If this was a simple investment – say you had bought shares for £10,000 in 1996 that today you sold for £40,000 – then your gain would be £30,000. No allowance is made for inflation over the 28 years you have owned them.That has been much reduced recently from £12,300 in 2022/23 to £6,000 last year and halved again to £3,000 this tax year.
When you sell the Accumulation Trust you work out the taxable gain by adding the 28 years of notional distributions – the length of time you have held the trust – onto your original cost of £10,000 to give the total base cost for CGT. The rate of tax due on that gain will depend on your other income. If you are already a higher rate taxpayer then the rate is 20 per cent and the tax due would be £2,400.
If the answer to that calculation is less than £37,700 then the tax due on the gain will be 10 per cent. If the total is more than £37,700 the tax will be 20 per cent on the amount above that and the balance will be taxed at 10 per cent. It is possible of course that Rachel Reeves may change the tax-free allowance or the rates of CGT in her Budget on 30 October. If she does then the change could happen at once or begin from next April.