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Where Taxpayers and Advisers Meet

Minimise CGT on shares before I'm Sunak'd

Pa954
Posts:2
Joined:Wed Nov 25, 2020 10:06 pm
Minimise CGT on shares before I'm Sunak'd

Postby Pa954 » Wed Nov 25, 2020 10:37 pm

I own some ordinary shares in a company I work for who will likely sell next financial year.
If the government increases CGT to income tax levels I will have a hefty bill to pay.
1. Can I sell the shares to my partner to realise a 20% gain this year?
2. Does she actually have to transfer the full amount of money to me or could I settle for an IOU? (Obviously I have to pay the tax man).
3. Can she then sell the shares back to me at a later date but in time for the sale? If so after how long? Any problems with this?
4. Or would a gift be better?
5. if I was to then get married to her would she then be able to more easily sell or gift the shares back to me in time for the sale? If so after how long? Any problems with this?

Thanks for helping me keep more of my retirement fund.

AGoodman
Posts:1131
Joined:Fri May 16, 2014 3:47 pm

Re: Minimise CGT on shares before I'm Sunak'd

Postby AGoodman » Fri Nov 27, 2020 11:55 am

Assuming the shares aren't subject to any special tax regime and you either bought them on the open market or paid tax when you received them:

1. Yes
2. She could owe you but you run a risk that you could be caught by an anti-avoidance provision (yet to exist). It's only a very small risk provided you do actually transfer the shares to her.
3. Yes - she would make a gain or loss if the price has moved. If she makes a loss, she probably won't be able to use the loss as she won't have a corresponding gain. Do not do this within 30 days and there should not be any agreement (written, oral or just an understanding) that she will do this. In all, best that she does not sell them back to you; there is likely to be little point to it and it will look pre-ordained.
4. No different - although she shouldn't give them back to you (that would look highly artificial) and she shouldn't give you the proceeds back either because that looks like she was just selling on your behalf.
5. If married, transfers between you would be no gain / no loss so a sale/gift to her makes no difference to anything.

Pa954
Posts:2
Joined:Wed Nov 25, 2020 10:06 pm

Re: Minimise CGT on shares before I'm Sunak'd

Postby Pa954 » Sun Nov 29, 2020 4:39 pm

I believe I need to be the owner of the shares when they are disposed.
So do I have any options?

AGoodman
Posts:1131
Joined:Fri May 16, 2014 3:47 pm

Re: Minimise CGT on shares before I'm Sunak'd

Postby AGoodman » Wed Dec 02, 2020 11:23 am

Not really. Difficult to help on options without knowing the detailed company law situation - presumably you are tied up in the articles or shareholders agreement - but i doubt there is much you can do.

If you own 5% of the company, you could consider business asset disposal relief (BADR, the new Entrepreneurs Relief)

bd6759
Posts:3451
Joined:Sat Feb 01, 2014 3:26 pm

Re: Minimise CGT on shares before I'm Sunak'd

Postby bd6759 » Wed Dec 02, 2020 11:13 pm

I believe I need to be the owner of the shares when they are disposed.
You'll need to explain this. Selling the shares to reduce future gains was your proposal. if you can't sell the shares, your original post makes no sense.


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