CGT on sale of shares

johnnyl

Hi all

If you have a capital gain of over the threshold on the sale of shares can this be transferred to your wife to get 2 x tax free allowances.
If so, how is this done? Do you have to transfer the shares over so that she owns them before sale or can you do it post sale?
Finally, I have shares on an online dealing account. If I have to transfer shares over how do I do it from an online perspective or does it have to be done in paper form?

cheers all. Im new to this

chris_m

I'm sure you have to transfer the shares themselves to your wife - otherwise you'll made a gain when you sell them before giving her the cash.

As to how you do it from an online a/c I don't know - not having a wife it's not something I've needed to investigate ;-)

holly_hobby

You can not transfer your unused personal CGT allowance to any other indvidual, nor can any unused allowance be carried forward to the next tax yr - however CGT losses may be carried forward, which can help in reducing exposure.

You could of course transfer shares to your wife - of which there is no CGT liability between spouses - and which I'll touch on later in this post.

Or, given that each tax yr you receive a full new allowance, why not stagger the sale of your shares over 2 tax yrs (in reality say over 2 days) to mititgate liability ie. dispose of shares on 5 April 2013 (offset annual allowance of £10,600), and also 6 April 2013 (offset annual allowance of £10,600) - giving you a max combined personal exempt amount of £21,200 - unless you are looking a big gain I would hope that this would handle any liability you have.

If transferring to wife, and if your plan is to immediately sell the shares tsfd into your spouse's name, there could be HMRC issues if they consider the transfer was predetermined or an associated action, which essentially means that HMRC may argue that the transfer was excercised solely to minimise CGT, and may cite that the gain realised on disposal of the shares is actually yours. So just bear this in mind - if of course you don't intend to immediately dispose of the tsfd shares, transferring to your Spouse would be a beneficial tax planning tool.

I would suggest chatting this through with you tax adviser to ensure that you handle matters to your advanage.

Hope this helps

Holly

johnnyl

holly_hobby wrote: »

You can not transfer your unused personal CGT allowance to any other indvidual, nor can any unused allowance be carried forward to the next tax yr - however CGT losses may be carried forward, which can help in reducing exposure.

You could of course transfer shares to your wife - of which there is no CGT liability between spouses - and which I'll touch on later in this post.

Or, given that each tax yr you receive a full new allowance, why not stagger the sale of your shares over 2 tax yrs (in reality say over 2 days) to mititgate liability ie. dispose of shares on 5 April 2013 (offset annual allowance of £10,600), and also 6 April 2013 (offset annual allowance of £10,600) - giving you a max combined personal exempt amount of £21,200 - unless you are looking a big gain I would hope that this would handle any liability you have.

If transferring to wife, and if your plan is to immediately sell the shares tsfd into your spouse's name, there could be HMRC issues if they consider the transfer was predetermined or an associated action, which essentially means that HMRC may argue that the transfer was excercised solely to minimise CGT, and may cite that the gain realised on disposal of the shares is actually yours. So just bear this in mind - if of course you don't intend to immediately dispose of the tsfd shares, transferring to your Spouse would be a beneficial tax planning tool.

I would suggest chatting this through with you tax adviser to ensure that you handle matters to your advanage.

Hope this helps

Holly

most helpful, thank you very much

holly_hobby

My comments are in reference to what may arise on immediate disposal of the shares by the spouse on transfer - e.g HMRC may consider the tsf to the spouse and direct disposal as action by the Donor of tax avoidance (ie the transfer was purely and solely to avoid paying tax on disposal, the Donor having exhausted their own personal annual CGT allowance for that financial yr)

If the sale is deemed as non-contrived - then yes any gain will be relieved by the spouse's own annual unused CGT allowance upto £10,600 for 2012/13.

My source is I am a qualified financial advisor - although I do not operate as a tax expert.

Please check your own tax position with your tax advisor or HMRC before you act upon any advice given on a forum, which is for discussion only.

Hope this helps

Holly

peterg1965

Over how many years can you carry forward losses for CGT purposes?

(Sorry if this is seen as high jacking !)

holly_hobby

Unlimited and until exhausted - but you must advise or "claim" the loss with HMRC within a prescribed timeframe, before application may be permitted (the cut off points for registration is generally 4 yrs from the end of the tax yr within which the loss was realised - depending if you are SA or PAYE).

Hope this helps

Holly