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Section 104, CGT and transfers between spouses
gadgetmind
Posts: 11,130 Forumite
in Cutting tax
Here's the scenario.
My wife and I each own shares in company A with a relatively high acquisition cost. I also have some approved options with a low acquisition cost.
My plan is to gift my current holding to her, and she will then have a section 104 holding with "merged" acquisition costs. I will then exercise my options and transfer them directly to an ISA as per the rules. Obviously it makes sense to do this with shares with a lot of gain.
She can then gift some shares back to me and we can both use our CGT allowance. Obviously it makes sense to do this with shares with not much gain.
My reading of the rules suggests this is all totally legit so please tell me if there is some killer drawback!
My wife and I each own shares in company A with a relatively high acquisition cost. I also have some approved options with a low acquisition cost.
My plan is to gift my current holding to her, and she will then have a section 104 holding with "merged" acquisition costs. I will then exercise my options and transfer them directly to an ISA as per the rules. Obviously it makes sense to do this with shares with a lot of gain.
She can then gift some shares back to me and we can both use our CGT allowance. Obviously it makes sense to do this with shares with not much gain.
My reading of the rules suggests this is all totally legit so please tell me if there is some killer drawback!
I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
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