Crystallising capital gains without selling assets

There are numerous occasions when it can be tax efficient to crystallise capital gains (eg to make effective use of losses or to take advantage of the CGT exemption prior to becoming UK resident). In this post we look at some more advanced strategies for crystallising capital gains. 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. if for instance you'd been a long term non resident and were planning to return to the UK one option would be to just enter into a contract with a friend or controlled company prior to the date of your return, but NOT complete. This would then give you chance to assess the position on your return to the UK. If you decided you did want to sell 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 allowing you to weigh up your options after you return whilst still securing the CGT exemption. The benefit of this is route is that if you come to the UK and for whatever reason don't want to crystallise the gain you can 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. Forward sale strategies There are a number of effective structures using forward and option contracts, selling assets to a connected trust or company. This triggers the CGT disposal but by using option contracts it the assets to be repurchased in the future. Transfer to a CGT wrapper Another alternative is to transfer assets to an Open Ended Investment Company (OEIC) or Authorised Unit Trust (AUT), so triggering a gain and achieving deferral on any future gains.