Using uncompleted contracts to fix the disposal date before 22 June

We've look at methods to fix the disposal date before 22 June in some of our key articles eg: More advanced strategies for triggering capital gains before the Emergency Budget Fixing the disposal date before 22 June to reduce your capital gains tax However, of interest to many is the use of uncompleted contracts. Remember that the main aim here is to have the gain charged under the current 18% CGT rate as opposed to a 40% or 50% rate. There is of course a key downside to crystallising a disposal: There is a risk that for whatever reason you may not be affected by an increased CGT rate. In this case you would then have crystallised the gain and would be subject to a CGT charge, even though you may not have arranged an external disposal. There are options that could allow you to mitigate this risk - most notably by using uncompleted contracts. Uncompleted contracts Usually the date of disposal of an asset is the date of the exchange of contracts. However this only applies where there is an actual completion. If there is no completion then exchange of contracts on their own would not crystallise a CGT charge. Therefore one option would be to just enter into a contract with a friend or controlled company prior to 22 June, but NOT complete before 22 June. If there is an increase in the rate of CGT that is applicable to you, you would then carry on and complete the contract. The date of the exchange would be the date of disposal for CGT purposes. Therefore by entering into an unconditional contract for the sale of an asset, this provides a hedge against an increase in capital gains tax rates, with the date of exchange being treated as the date of disposal in the event of an increase in rates. The benefit of this is route is that if the CGT rate doesn't increase you could just leave the contract uncompleted. There would then be no disposal for CGT purposes and you'd just be classed as retaining the asset. This route potentially gives you the best of both worlds.