This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Is transfer of Share ownership to spouse necessary before sale to avoid UK CGT?

EvilMuppet
Posts: 1
Joined: Fri May 24, 2019 8:48 pm

Is transfer of Share ownership to spouse necessary before sale to avoid UK CGT?

Postby EvilMuppet » Fri May 24, 2019 10:22 pm

Hi,

I have a quick question about some CGT advice given to me by my wife’s company that I am not sure is correct.

The situation is my wife has been gifted some shares by her company as part of their IPO. She has paid a peppercorn for these so I believe they are all taxable as a CGT gain. The shares are currently worth 70k.

We are not in a hurry to sell the shares, so want to bleed them out using our CGT 12k allowances per year. It would be beneficial if we both could do this (enabling 24k a year tax free).

We have been told we can transfer some of the shares to my name via a broker transfer for a £100 fee.

However we have been told that this is unnecessary if wife sells 12k shares in her name, but asks for the proceeds to be placed in a joint Bank Account, effectively showing that proceeds of that sale have been gifted directly to me and therefore I could use my CGT allowance against them.

It is the second part of this advice that I am not sure is true? Can anyone confirm it before we go ahead? We just didn't want to make a mistake.

Thanks for the help in advance.

bd6759
Posts: 3106
Joined: Sat Feb 01, 2014 3:26 pm

Re: Is transfer of Share ownership to spouse necessary before sale to avoid UK CGT?

Postby bd6759 » Sat May 25, 2019 12:28 pm

It can be done the way you were told, but expert advice to ensure it was the properly would cost more than the £100 that would put the matter beyond doubt.

Spend the £100.

someone
Posts: 383
Joined: Mon Feb 13, 2017 10:09 am

Re: Is transfer of Share ownership to spouse necessary before sale to avoid UK CGT?

Postby someone » Sun May 26, 2019 6:48 pm

The situation is my wife has been gifted some shares by her company as part of their IPO. She has paid a peppercorn for these so I believe they are all taxable as a CGT gain. The shares are currently worth 70k.
I'm not an accountant but I was of the understanding that if shares are sold to an employee at an undervalue the gift part is taxed as income not capital gains.

AnthonyR
Posts: 277
Joined: Wed Feb 08, 2017 2:33 pm

Re: Is transfer of Share ownership to spouse necessary before sale to avoid UK CGT?

Postby AnthonyR » Mon Jun 03, 2019 10:56 am

The situation is my wife has been gifted some shares by her company as part of their IPO. She has paid a peppercorn for these so I believe they are all taxable as a CGT gain. The shares are currently worth 70k.
I'm not an accountant but I was of the understanding that if shares are sold to an employee at an undervalue the gift part is taxed as income not capital gains.
Plus if the shares given are listed on a stock exchange now as a result of the IPO they are likely to be readily convertible assets and should have been taxed under PAYE. Do you know if tax was deducted at source and paid by her employer? If so she might have been treated as acquiring them at current market value so CGT will only be due if there has been an increase in value.

I would have expected a company going through an IPO to get tax advice on this sort of thing, but double check as it'll change the tax position considerably.
Anthony Rogers LLB CTA TEP
Fusion Partners LLP
anthony@fusionpartners.co.uk


Return to “Capital Gains Tax, CGT”