Now is the time to think about Tax Loss Harvesting!

If you live in the UK you will be aware that April 5th 2026 is the end of the tax year. Since it is a Sunday, Friday April 3rd 2026 is the last trading day.

If you have investments in a General Investment Account (GIA) such as a Trading 212 Invest account, you should be thinking about Tax Loss Harvesting (TLH) now.

If you want more details on what TLH is, I suggest you ask ChatGPT about Tax Loss Harvesting in the UK (but don't believe all it tells you!), but here is what I am currently considering.

If you have a GIA, then you probably have already maxed out your ISA(s) with the full £20k allowance.

So we now have to think about:

• Income - will my income (earned+pension) exceed £50k this tax year? Is so this will class me as a higher rate tax payer. That would mean that as well as any income above £50k being taxed at 40%, dividends would be taxed at 33.75% and CGT would be at 24%
• Gains on sold shares in the tax year - if my net gains exceed £3k then I will have to report my gains to HMRC and be taxed on them at 24% instead of 18% if a higher rate tax payer. CG gains do not affect my income tax bracket but I will have to pay the higher rate of 24% on gains exceeding the £50270 threshold.
• Do I need to reduce my taxable income? If I am in danger of exceeding the £50k tax bracket, I can reduce my taxable income by contributing more to my pension/SIPP. Since I am retired, I can put a max. of £2880 into a SIPP and get 25% added by the gov. for free - and it also can be subtracted from my earned income total. There is a tax window on a SIPP up to the age of 75 if I am retired and not earning much apart from my pension income. In this way I can reduce my taxable income and get tax relief by contributing to a SIPP (I am not drawing down on my SIPP).

As it is sensible to bring down my taxable earnings as much as possible, I am looking at the following actions:

1. Put the maximum I can into my SIPP (which I am not drawing down on) - this is £2880 which will save me about £200 in CGT.
2. Reduce the net profit on my side hustles (selling eBooks, Google Ads, affiliate links, etc.) for this tax year by increasing costs - e.g. buy 2-year subscriptions for hosting instead of 1-year).
3. Reduce the gains in my GIAs by selling the losers before April 6th 2026.

Actions 1 and 2 have already been done, but Action 3 (reduce CG) needs attention. Because I have already sold all my Interactive Investor GIA shares and moved them to Trading 212, I have crystalised a gain of £6k. I also crystalised gains inside my T212 GIA Invest account by selling shares and re-balancing Pies (I now avoid Pies in the T212 Invest account because I find Pies a nuisance in a taxable account and also T212 shows misleading data if you have the same shares inside a Pie and also outside a Pie at the same time).

So the first step is to calculate the Capital Gains I have currently made (on ii and T212) and work out what to do.

Here are my considerations for my T212 GIA account:

1. Reduce gains by selling losing shares/ETFs before April 6th - Tax loss harvesting.
2. After April 5th, sell any accumulating ETFs that I hold in the GIA (because working out ERI is too painful and I may be paying too much CGT as a basic rate tax payer if I don't allow for ERI)
3. Crystalise £20k in cash to xfer to my T212 ISA after April 5th 2026. I may add some cash to get it up to the 20k or I may have enough from just selling shares.

Note that it is difficult for me to estimate the gain in this 2025-26 tax year as I have made hundreds of trades (I blame T212!), so I used both the cgcalculator.com site and the UK Tax Calculator site to calculate my current CGT position. Luckily, they both give similar results (ignoring ERI).

These are my planned actions over the next few months:

1. Sell most/all losing holdings to reduce gains for the 2025-26 tax year.
2. Identify all my held accumulating ETFs inside the T212 GIA account - I want to sell these and then buy them back inside my ISA on April 6th. If they are currently showing a loss then I will sell them before April 6th - if they are showing a gain, I will sell on April 6th or later.

Currently, I am looking at a £6k crystalised gain for the ii GIA which I previously sold and approx. £7k crystalised gains so far in my T212 GIA. In terms of uncrystallised losses inside my T212 account, I have about £5k of losses if I sold all my losing holdings. This would leave me with CGT on approx. £4k (13k-5k-3k=5k), and thus a CGT bill of approx. £1k which I will pay HMRC out of my normal earnings. 

Case Study

Income/Earnings £50k

Capital Gains      £10k

SIPP contribution (£2880 or £3600 gross)

Breakdown of Calculation (no SIPP)

1. Deduct the Annual Exempt Amount: Every individual has a tax-free allowance of £3,000 for the 2025-26 tax year.
   £10,000 (Gain) - £3,000 (Allowance) = £7,000 taxable gain.
2. Determine the Tax Band for the Gain: Your gain is added to your taxable income to see which band it falls into.
   • Remaining Basic Rate band: £50,270 (Threshold) - £50,000 (Salary) = £270.
   • The first £270 of your gain is taxed at the basic rate of 18%.
   • The remaining £6,730 of your gain falls into the higher rate band and is taxed at 24%.
3. Final Tax Due:
   • £270 × 18% = £48.60
   • £6,730 × 24% = £1,615.20
   • Total CGT = £1,663.80 (rounded to the nearest pound). 

But with the SIPP payment...

Revised Calculation (with SIPP contribution)

Because your total income remains £50,000, the CGT calculation is identical to the previous one but: 

1. Taxable Gain: £10,000 gain minus the £3,000 allowance = £7,000.
2. SIPP Contribution Benefit: Your £2,880 contribution (£3,600 gross) extends your basic rate threshold from £50,270 to £53,870.
3. Basic Rate Portion: The first £3,870 of your gain (£53,870 threshold - £50,000 income) is taxed at 18%.
4. Higher Rate Portion: The remaining £3,130 of the gain is taxed at 24%. 

Total CGT Due: £1,447.80