WRITING this with just a few days to go before the Budget, the key tax changes for Capital Gains Tax remain unclear – although hopefully, they will be clarified later today.

If the Chancellor’s Budget follows the coalition agreement, only the rules for non-business assets will change, with business owners still benefiting from entrepreneurs’ relief on at least the first �2million of their lifetime business capital gains.

For other assets, we may well end up with rules that look very similar to the 2007 Capital Gains Tax (CGT) regime, with gains taxed at Income Tax rates once some relief has been given to account for the length of time that an asset has been held.

So what should you do about that investment asset that has done rather well? If the rules change from today, there is clearly nothing you can do. However, it is more usual for CGT rules to change from April 6, so let’s assume that the changes will take effect from April 6, 2011 and you have a few months to make the most of the 18% flat rate of tax.

If you are considering realising a latent (“paper”) gain on an asset, it is sensible to ensure that the disposal will give rise to a taxable gain; if it does not, you may have incurred transaction costs needlessly.

Situations where an apparent sale does not actually result in a taxable disposal include the sale of an asset to your spouse or civil partner, which is deemed to take place on a no gain-no loss basis. Also, if you sell shares and buy them back within 30 days, the two transactions are matched so the original latent gain may not become fully chargeable.

It should be remembered that capital losses made in the same year as a gain reduce the taxable gains, possibly to nil, and potentially waste the annual exemption. Where large losses from previous years are available, there is probably no need to take urgent action as these can be set against capital gains made in future years to ensure no tax is payable, whatever the rate of CGT.

Conversely, if you are considering selling a range of assets now, retaining assets currently showing a paper loss may be tax-efficient; if the loss was realised now it would only be relieved at 18%, but if it is set against future gains, relief could be obtained at the new higher rate.

In addition, each individual can realise capital gains up to the �10,100 annual exemption tax free in 2010/11 (up to �5,050 for trusts). The annual exemption is available to each individual, including minor children, although individuals who claim the benefit of the remittance basis for a tax year will lose their entitlement to an annual exemption for that year.

Of course, it is possible that the exemption will be reduced if the Liberal Democrat proposals become law, so simply using the 2010/11 exemption while you can is just common sense.