Gifting shares and their tax liability

[Bob O'Sears]

Hi,

Please can somebody give me some advice about gifting shares. I have recently been gifted some share and now I wish to spread my good fortune amongst some friends. My idea is to gift them some shares that are under the CGT threshold (£7700 I believe). They all then wish to cash in the shares and use the maney as they see fit. Since I have had the shares they have risen but not by much.

My questions are:- Will there be any liability for tax for either me or my friends? Is CGT the only tax that is applicable?

Many thanks in advance for any advice as I can't find anything on the web site.

Regards,
Bob

[Huw Williams]

A gift is usually a chargeable event for CGT purposes - in other words you are right to consider it. If the shares are worth more than when you received them, there is a gain which may need to be reported to the Revenue (and tax paid if it goes over the annual exemption of £7,900 for the current tax year).

You would have a gain to report if it exceeds the thresholds (gain over the exemption or proceeds or value over 4 times the exemption).

When they sell, your friends will have the same reporting and tax paying requirement.

All this assumes that there are no special considerations (shares in a family business or gifts to charity for example).


Huw Williams
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West Bridgford
Nottingham
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