Tax for Fund

[NonDom41]

Can a husband gift his wife all or part of a non-reporting fund for her to sell in order for the sale to fall into a lower income tax bracket since she has no other income (unlike him)? Would the wife have to file a separate tax return or is there a way to jointly file this?

[AGoodman]

Yes, I believe the no gain/no loss provisions of s.2 TCGA still apply.

The income tax liability is charged on the "basic gain" (Reg 38) and this is computed using CGT principles including the no gain/no loss provisions:

39.—(1) In the case of a participant chargeable to income tax, the basic gain is a gain of the amount which would be the gain on that disposal for the purposes of TCGA 1992 if the gain were computed without regard to any charge to income tax arising under this Part.

There is no way to file a joint election. If your wife incurs an income tax liability then I think she will have to file a return.