Gifting shares

Disjoint

Good afternoon all,

I am very confused here in terms of the process of gifting shares.
Do I understand correctly the process, assuming 20% tax rate applies to all:

Father gifts £100,000 of BT to his son (over 18 years old). He purchased those shares at £10,000
Father is liable for £90,000 x 20% or £18,000 of taxes

New tax basis for the son is £100,000

Am I correct in my assumption, or as it's his son or some other weird reason he is not liable for the tax bill? Thank you in advance!
And by other weird reason, is it essentially possible for the son to carry them at the original tax basis of £10,000 without taxes payable.

eskbanker

CGT exemptions are available for gifts to spouses or charities, but not sons, so the father is liable for CGT as above, although the annual £12,300 CGT allowance would reduce the taxable amount, and even more so if the gifting could be staged over multiple tax years.

Going forward, the value for the son is the market value at the time of gifting, but this could be at least partially managed by using wrappers such as ISA or SIPP.

Disjoint

Fantastic, thank you

Keep_pedalling

You would be better off selling, paying the CGT and gifting the remainder in cash. Investing in singles shares is very high risk, there are better options for your son.

Robert_McGeddon

Disjoint said:

Good afternoon all,

I am very confused here in terms of the process of gifting shares.
Do I understand correctly the process, assuming 20% tax rate applies to all:

Father gifts £100,000 of BT to his son (over 18 years old). He purchased those shares at £10,000
Father is liable for £90,000 x 20% or £18,000 of taxes

New tax basis for the son is £100,000

Am I correct in my assumption, or as it's his son or some other weird reason he is not liable for the tax bill? Thank you in advance!
And by other weird reason, is it essentially possible for the son to carry them at the original tax basis of £10,000 without taxes payable.

1 If father is HR taxpayer then yes, 20% else some at 10% and the balance at 20%.

2 Could split the gifting across 2 tax years and get the £12.3K allowance twice.

3 If father has capital losses available then crystalising these permits an offset against the gain.