CAPITAL GAINS AND SHARES

eskbanker

JJDragonLivigno said:

The shares that my father had in an employee share plan - have risen a lot since his death. My mother is the beneficiary but they cannot be put in her name - she must sell before the 3 years is up.
She has other shares in lots of other companies that over their lifetime - have lost value.
My idea was for her to sell/put in someone else's name(so like selling) and the loss and costs of these put against the capital gains made from my fathers employee share plan shares.
Does this make more sense?
I have thought of splitting the the sale of the shares but it won't actually help that much as she has already used a lot of her capital gains quota for this tax year.  Hence the thought of optimising the estate by putting the shares in he heirs names - making a loss on them and offsetting the losses against the gains on my fathers shares which must be sold her her - the original beneficiary - and put on her tax form and capital gains.
thanks,
JJ

The fact that she has to sell the inherited shares shouldn't necessarily imply that she should be trying to offload others specifically to crystallise losses that can be offset against gains, i.e. don't let the tax tail wag the investment dog, as the saying goes.  However, if she wants to sell (or donate) some or all of the ones she already had, then yes, she can do so and in turn offset chargeable losses against gains.

You say she's used a lot of her CGT allowance for this year but seem to rule out splitting sales - that seems counterintuitive, or is she obliged to sell the shareplan ones before the end of this tax year?

It's now a bit clearer what you'd originally meant by putting shares in someone else's name - I'd interpreted that to mean transferring ownership from father to mother but you're actually talking about her transferring ownership to someone else again?  Is "putting the shares in he heirs names" meant to read 'others' names' or 'the heirs' names', i.e. is she looking to shift shares to other beneficiaries of the estate, potentially by deed of variation?

JJDragonLivigno

Hi,
it is a case of needing to optimise an estate, having to sell inherited employee share plan shares with a large capital gain since his death - its already coming up to 2 years since his death so it needs to be done fairly imminently.  We could push it to next tax year. But there comes a certain point in life where things need to be put in order and if that can be done tax efficiently then all the better.  Shares need to be sold/put in other peoples names that she would like to pass things on to and if that helps with the profit from the shares she must sell, then all the better.  
thanks,
JJ

Money_Grabber13579

Not wishing to be unhelpful but I think you might need specialist advice here as there are a myriad of complications here, not least because these shares seem to have been purchased as part of a share scheme.  Where the scheme is HMRC approved and the shares are held for their full vesting period, then any gains and losses will typically arise as capital gains or losses.  However, if the shares are sold before all the beating conditions are met, then they can by default become part of an an approved scheme, with gains and losses potentially being subject to income tax instead.  Putting that all together with beneficiaries and the person selling not being the person who beneficially owned them (I presume) means you have a very complicated scenario in your hands.

JJDragonLivigno

The person who is selling them is the person who inherited them from her husband who was the employee that took part in the scheme.  Surely that is just capital gains since she inherited.