Capital Gains Tax and gifting shares question

#1

So I own some shares which look like they could be :crossed_fingers: earning over the tax-free allowance and just seeing if anyone can answer this.

If I bought £5k of shares and selling now all would make £40k I think this year I can sell £17k worth this tax year without paying tax (£5k bought+£12k gained)?

Can I transfer some of the shares to my wife and she can sell them under her allowance? Is there a limit you can gift?

When she receives the shares and sells straight away does that mean her gain is actually near to zero, in other words could I gift the remaining £23k worth of shares to sell without her paying gains tax.
As in the £23k of shares holding went up to be worth £24k before selling her gain is £1k?

Or is the gain to her based on the price I paid for them, and she could only sell £17k worth (having gained £12k)?

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#2

This is what you need to see.

I believe you can transfer shares to your spouse. But they would have to pay CGT if they dispose of them based on when you acquired the shares.

You can also gift them to charity CGT free.

(you should seek advice from a professional if you are unsure)

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#3

You can gift however much you like to your spouse, she/he will take on the shares with your base cost (i.e. the price you paid for them). They can then sell and use their own annual exemption.

In your example you would both hold half the shares with a base cost of £2.5k each. You then divide that base cost by the number of shares owned to give a cost per share. It’s that cost you then use to work out your gain. You can’t subtract the entire £5/2.5k base cost from the first sale.

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(Tom Lynch) #4

There is some information here related to a joint allowance under the heading: ‘CGT allowance for 2019-20’:

Also, you are ~10 days too late as you could have split them across two tax years last week.

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(Tony, Secret Lemonade Drinker) #5

Can we rename this topic?

I suggest “I need a way of not paying the full tax on all this lovely profit I made on my investment”.

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#6

Shares are currently suspended atm, haven’t made a nice profit yet. Hopefully May :pray: x8 :partying_face:

Consider transferring assets into joint names if you’re married or in a civil partnership. By transferring an asset into joint ownership, you can both make use of your tax-free allowance so that up to £24,000 of any gain is tax free in 2019-20

:+1:

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#7

Of course there’s no way I’m intending on paying any more tax than I need to. Why would you? :crazy_face: :stuck_out_tongue:

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#8

Thanks, yeah that makes sense. If £5k spent buying the shares and made £40k, if I split half with my wife we could both draw £14,500 this year, keeping £5,500 worth of shares each?

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#9

Hope the shares aren’t Debenhams :joy:

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(Andy) #10

You’ll be campaigning against ISAs and pension allowances next…

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(Kevyn) #11

:sweat_smile: :sob:

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(4 Round Investor) #13

the thought of being taxed on the sale of my Monzo shares

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