Sometimes the choice to sell isn't yours. Fund mergers, manager wind-downs and corporate actions can crystallise a gain you weren't planning to take - and the UK's reduced CGT annual exempt amount makes that bite harder than it did a few years ago.

Key takeaways

  • The CGT annual exempt amount fell from £12,300 in 2022/23 to £3,000 from 2024/25 (HMRC).
  • From 30 October 2024, main CGT rates on shares and funds rose to 18% (basic) and 24% (higher) (HM Treasury Autumn Budget 2024).
  • A forced sale outside an ISA or SIPP is still a disposal for CGT.
  • 'Bed and ISA' or 'Bed and SIPP' can shelter future gains.
  • Spouses can transfer Assets free of CGT to share allowances (HMRC).

Why funds force investors to sell

Authorised funds can be wound up by their manager (with FCA permission) when they shrink below viable scale, or merged into a sibling vehicle. Investment trusts can also be put through a tender or wind-down following an AIFM proposal and Shareholder vote.

When does CGT apply?

Disposal occurs when ownership changes, even involuntarily. Gains above your annual exempt amount (£3,000 in 2025/26) are taxed at the post-October 2024 rates of 18% or 24% depending on your income band.

Ways to soften the blow

Use the spouse exemption before disposal where possible, harvest losses elsewhere, spread realisations across tax years, and rewrap proceeds into an ISA (Bed and ISA) up to the £20,000 annual subscription limit.

What this means for UK investors

With the CGT allowance now £3,000, even modest gains can be taxable. UK investors holding mid-sized fund positions in general accounts should plan ahead so a forced sale doesn't blow through a year's allowance in one go.

Risks to watch

  • Underestimating cumulative gains across multiple holdings.
  • Missing the 60-day reporting deadline for residential property CGT.
  • Triggering bed-and-breakfast anti-avoidance rules within 30 days.
  • Future Budget changes (the Office for Budget Responsibility tracks CGT receipts annually).