More than two thirds of platforms are not providing advice firms with holistic capital gains tax (CGT) planning support, analysis from tax reporting firm FSL has found.

Its study showed that less than third of platforms were providing tax tools that enable advisers to include off-platform assets in their clients’ financial plans, despite 27 per cent of advisers seeing these tools as an important functionality.

Furthermore, the same percentage (27 per cent) of advisers view scenario planning tools as an absolute ‘must have’ feature, but a quarter of platforms do not provide them.

FSL said the findings reflected a recent study by The Lang Cat, which showed that the recent changes to CGT announced in the Autumn Budget were impacting 48 per cent of advice firms.

More people are being brought into scope of CGT, with the latest figures from HMRC showing a 36 per cent increase in the number of people paying the tax compared to 2019/20.

FSL’s research also found that CGT functionality and support provided to advisers through platforms was influencing their platform selection and due diligence, with 76 per cent of advisers saying the support offered to them was affecting which providers they were choosing to work with.

Data from The Lang Cat’s Analyser software showed that 62 per cent of advice firms cited the need for a CGT calculator when conducting their due diligence and looking for platforms to work with.

“We’re not surprised to see advisers are increasingly concerned about how CGT is impacting their work and clients’ portfolios – especially post budget,” stated FSL MD, Michael Edwards.

“With the government wanting to raise more revenue, and further hikes to CGT not being ruled out in the next autumn statement this means more demand on advisers’ time.

“It’s good to see many platforms have the absolute basic tools in place to support advisers.

“Though it’s increasingly apparent that they need more sophisticated solutions to help ensure clients make the right investment choices to maximise any tax allowances and provide them with the right data to ensure they avoid hefty penalties.

“This sort of activity can be complicated and time consuming for advisers so it’s vital that they’re adequately supported by their platform provider.”

11.2 Financial Planning director, Greg Moss, added: “CGT planning has become a major issue for the majority of our clients and is a big part of our service and advice process.

“Changes to allowances in particular have meant many clients now have an ongoing need to plan their disposals and exposure to CGT, and as advisers, we need good, reliable tools to help us with this.

“Platform functionality is still very variable. Good CGT reporting functionality is a key part of our platform due diligence because it is so embedded in our periodic review process.”

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