Capital Gains Tax?

redrose59

I hope someone can help me. I do not work and am therefore a non taxpayer. My husband gave me shares last year worth about £20k at todays price. We now wish to sell these to give our daughter a deposit for a house. Will I be liable for capital gains tax and as a rough estimate how much would it be? How do I declare this if I do not fill in a tax return? I've looked at HMRC site and to be honest am completely bamboozled. The examples they give don't see to fit my circumstances.

Pennywise

It depends on how much your husband paid for the shares. Your capital gain is selling price less original cost price, less incidental purchase/sale costs.

As you're married, the shares were transferred to you "inter spouse" and as such you inherited your husband's base cost prices for them.

If the proceeds are only £20k and the capital gain is under the annual exemption limit of £10-£11k, then you have no tax to pay and no need to complete and tax returns etc.

PaulCooper

Here's my simplistic take on it

• Assuming the shares were purchased by hubby for £10k & you sell them for £20k, you have made a Capital Gain of £10k. There is no Capital Gains Tax to pay, as each person has an ANNUAL allowance of just over £10k (£10400 I think?)
• Assuming the shares were purchased by hubby for £0 & you sell them for £20k, you have made a Capital gain of £20k, you would have to pay CGT on the amount over your allowance (around £9600)

If the later case fits, or it looks like you're due to pay some tax, give some of the shares back to hubby to use his CGT relief, or better still give some of them to your duaghter, she sells them and uses her CGT relief.
If you still have problems you could split the sale of the shares over 2 tax years i.e. either side of the April 5th

If you stay below the CGT limit (£10400 or whatever it is) there is no need to declare it to the taxman
Possibly someone will come on here and shoot this down, but it has worked for me, with some hefty professional tax advice
Paul

redrose59

Thank you Pennywise. I think we'll be fine as the gain is well under the annual exemption limit. Phew!

grey_gym_sock

PaulCooper wrote: »

or better still give some of them to your duaghter, she sells them and uses her CGT relief.

i see that OP doesn't need to worry about this, but note that transferring shares to your daughter wouldn't work. it's only in transfers between married couples where the recipient is treated as having acquired the share for whatever they cost the donor. if you transfer shares to anybody else, you're treated as having disposed of them for their market value at the time of the transfer, and the recipient is treated as having acquired them for that same market value.

dzug1

grey_gym_sock wrote: »

if you transfer shares to anybody else, you're treated as having disposed of them for their market value at the time of the transfer, and the recipient is treated as having acquired them for that same market value.

Yes - but if the aim is to split the shareholding to get individual chunks of it under the CGT limit then that doesn't matter

zygurat789

dzug1 wrote: »

Yes - but if the aim is to split the shareholding to get individual chunks of it under the CGT limit then that doesn't matter

But in achieving that aim it would be pointless to incur an unnecessary CGT liability.

The gains on all transactions liable to CGT are aggregated during the tax year.
Any losses brought forward are deducted.
The exemption limit is deducted
CGT is chargeable on any gain

dannio92

Hello,
Could anyone clarify this please.
I was left shares in a will so have had no initial outlay so if I sold some they would all be profit..
Am I correct in assuming that If I sell I could make £10600 per year without having to pay CGT

Any advice greatly appreciated

nomunnofun

dannio92 wrote: »

Hello,
Could anyone clarify this please.
I was left shares in a will so have had no initial outlay so if I sold some they would all be profit..
Am I correct in assuming that If I sell I could make £10600 per year without having to pay CGT

Any advice greatly appreciated

You would not be correct. Your cost price is, broadly, the value of the shares at the time when you inherited them. You would need to make a gain of £10600 above this price before you are liable to pay CGT.