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Where Taxpayers and Advisers Meet

Applying capital loss to sale of gifted asset

Matthew P
Posts:74
Joined:Thu Oct 30, 2008 12:46 pm
Applying capital loss to sale of gifted asset

Postby Matthew P » Mon Dec 16, 2024 4:34 pm

If my spouse gifts an asset to me, and I then I sell it, can I apply a previous capital loss I have made it to mitigate the capital gain?

wamstax
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Joined:Wed Aug 06, 2008 3:39 pm
Location:Operate Nationally but based in Aberdeen
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Re: Applying capital loss to sale of gifted asset

Postby wamstax » Mon Dec 16, 2024 5:02 pm

Yes as long as it was not a loss made on a connected party transaction
regards and hope this helps
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Matthew P
Posts:74
Joined:Thu Oct 30, 2008 12:46 pm

Re: Applying capital loss to sale of gifted asset

Postby Matthew P » Tue Dec 17, 2024 9:41 pm

Hmmm... I will have to figure out what that phrase 'connected party transaction' covers. Let's see if it is involved here....

I started a business.
When I sold it two years ago I made a loss, given the cost of staff, its rather feeble income, etc. It never really became profitable.
So there was a capital loss, which I claimed in my Tax Self-Assessment Form.

Now I want to sell some Unit Trusts that my wife owns. Their value has risen about 100% since purchase.
(1) I get her to transfer the units to me. No CGT is payable, as we are husband and wife.
(2) I then sell the units. CGT would obviously be payable.
(3) I cover the CGT by the capital loss made on the earlier sale of the business. So in fact no CGT is payable.

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That seems to work, though there are costs involved, as the issuer of the unit trusts will probably charge me to take my wife's name off the units and put my name on them. If there was a way around that, it would be nice.


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