For 2010/2011, individuals are entitled to an annual exemption of £10,100 and trustees to £5,050 (this is reduced where the settlor has set up several trusts, subject to a minimum of £1,010 per trust).

If you think that your investments have made substantial unrealised gains and you have not yet made use of your annual allowance, you should consider encashing sufficient investments to utilise your entitlement. You could consider reinvestment in an ISA (subject to the ISA limits), reinvestment by a spouse/civil partner or reinvestment into a similar holding.

Consideration should be given to transferring assets between spouses/civil partners before encashment to enable each to use an annual allowance.

It is important to consider whether any investments have made a loss and whether excess gains could be offset by any losses. Losses can be carried forward indefinitely, so it is important to include gains, losses and the annual exemption in any calculation to determine how to maximise relief.F

The Financial Services Authority(FSA) does not regulate tax advice.