How can I prevent a Capital Gains Tax charge now that the threshold has fallen again?

With the Capital Gains Tax threshold now reduced to £3k, I’m due to pay it this year. Can you advise what this involves and whether I can offset it with some shares that have done terribly? Would also love to hear your views on investing in startup funds and the tax benefits.

CGT is in the sights of politicians so I think you are right to focus on this. If you have money in an ISA, you don't need to worry about this. But if you have money outside an ISA, and if you make more than £3,000, you will need to declare this and pay tax on it.

If you are married or have a civil partner, they have an allowance too of course so you may want to read up on gifting them some assets moving forward. If they then sell these and their gains are under the £3,000 allowance, they won't need to pay tax. For this year, you could investigate selling any duds in your portfolio and 'realising' any capital losses which will offset any capital gains. You can carry forward losses too - the HMRC website is quite helpful on this.

You can also investigate a 'Bed and ISA' this tax year - this involves getting your platform to sell funds or shares held outside an ISA and then buying them back inside the ISA. This will trigger CGT but has the benefit of shifting more assets into a tax-free environment and most platforms won't charge you to re-purchase the shares in the ISA, so you can save on transaction fees this way too. Contact your platform to check what they will or won't support. The same concept applies to pensions - it's called 'Bed and SIPP'! Silly name...

When it comes to investing in start-up funds, I’d be really hesitant. This is big risk stuff and the chances of early stage companies going under are significant. However, as you suggest, the tax perks of both VCTs and EIS investment vehicles are really interesting. But this should only ever be a small portion of assets for most of us (different if you are mega-rich and confident).

Crowdfunding platforms will give you a flavour of some EIS opportunities, although do mind the risk you are taking. And VCTs are interesting if you can lock your money away for quite long timeframes. Octopus have some interesting options and a decent website with more information or some investment platforms, or some investment platforms offer these and have good information, or look at the website WealthClub for more info on these sorts of investments.