Hi folks and welcome to another five minute Friday here on Meaningful Money.

Great to have you with me again.

Sorry about last week, time got away from me, you know, these things happen. I have a life, you know.

I said, don't have a life. So listener and viewer, Ian, a send me an email asking about what he should do

when he's maxed out his pensions and

premium bonds and all that sort of stuff.

Banged my hand on the desk.

And he wonders whether it's worth having some money in investments

which are not tax wrapped so not in

ISIS and pensions or whatever in order particularly to make use of the capital

gains allowance now we call that I say we that's the financial planning profession we call that capital gains

harvesting actually do we I don't know whether we do or not but I do and so that's

what I have decided this will be called capital gains harvesting how it works and why it's worth considering.

So let's put five minutes on the clock down here. I'm going to do this Peter McKinnon style.

No idea how much that pleased me. And say a quick thank you to 7-I-M down here for sponsoring the show and let's crack on

So how does capital gains harvesting work? Well, let's use an example. That's always the best way to explain this stuff. So let's say you have 100,000 pounds invested in just a normal general investment account, a GIA. I know that'd be nice, wouldn't it? But let's say you do and let's assume that that grows by

let's pick a figure out of the air 11.7% why? Because that will mean at the end of year one

you will have 111,700 pounds and the gain over the year will be 11,700

pounds which is quite convenient because that happens to be the capital gains

tax allowance in the 1819 tax year when I'm recording this.

So you've made a gain of 11,700 but you haven't really because in order to make that gain

in order to realize it you have to sell your investments.

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