Find value of transfered shares for CGT 18 February at 10:47PM in Savings & investments 6 replies 278 views

thriftytwosome

Can anyone help me with CGT please? My husband bought and sold shares in the company he worked for over the years and transferred some into my name in 2003. He sadly died a year ago.  I would like to take advantage of the CGT allowance of £12300 this year by selling some of my shares but I don’t know what he originally paid for them so am unable to calculate the likely gain. Do I take the value of the share price in 2003 on transfer or do I have to try to work out the purchase value from the various purchases and sales of the shares before this date? I have tried ringing HMRC for advice but so far have not got through to anyone. I’d be grateful of any advice.

eskbanker

https://www.gov.uk/capital-gains-tax/gifts (written from the perspective of the original purchaser) explains that your gain needs to be calculated from the price your husband paid, not the value at the time of the transfer:

If they later sell the asset

Your spouse or civil partner may have to pay tax on any gain if they later dispose of the asset.

Their gain will be calculated on the difference in value between when you first owned the asset and when they disposed of it.

If this was before April 1982, your spouse or civil partner should work out their gain using the market value on 31 March 1982 instead.

They should keep a record of what you paid for the asset.

35har1old

thriftytwosome said:

Can anyone help me with CGT please? My husband bought and sold shares in the company he worked for over the years and transferred some into my name in 2003. He sadly died a year ago.  I would like to take advantage of the CGT allowance of £12300 this year by selling some of my shares but I don’t know what he originally paid for them so am unable to calculate the likely gain. Do I take the value of the share price in 2003 on transfer or do I have to try to work out the purchase value from the various purchases and sales of the shares before this date? I have tried ringing HMRC for advice but so far have not got through to anyone. I’d be grateful of any advice.

Do you want sell more than £12300 of shares ?
Next years allowance is £6000

Ciprico

We had this issue recently on sorting probate and I understand if you can't prove otherwise you have to assume 100% capital gain.

As previously suggested sell 12k before April and 6k afterwards...

Hopefully that puts a dent in the amount...

Probably not relevant in this case but if the situation arises between spouses and one is on the way out.. Transferring the shares to the to the poorly spouse avoids the Cgt issue but does mean the shares are subject to IHT. But there is no iht between spouses so the shares fall back to the original owner without the cgt liability . So Cgt and iht both avoided

We found this out too late, and at the time moving shares around was not a priority... 

thriftytwosome

Thank you all for your comments. I think I'll have to delve more into the paperwork.

Regarding the CGT issue with shares, I too have only just found out that CGT is extinguished on death, as the value of shares is disclosed for possible IHT and Probate. IHT was no problem as my husband's assets passed to me but I didn't realise that the CGT

on my husband's shares would not be due, as Ciprico mentions, and I agree its certainly not  priority at that time. I will have to give this more thought. I just want to make things more straightforward if I can.

olbas_oil

eskbanker said:

https://www.gov.uk/capital-gains-tax/gifts (written from the perspective of the original purchaser) explains that your gain needs to be calculated from the price your husband paid, not the value at the time of the transfer:

If they later sell the asset

Your spouse or civil partner may have to pay tax on any gain if they later dispose of the asset.

Their gain will be calculated on the difference in value between when you first owned the asset and when they disposed of it.

If this was before April 1982, your spouse or civil partner should work out their gain using the market value on 31 March 1982 instead.

They should keep a record of what you paid for the asset.

With disposals up to 2008, one  included indexation when calculating the base cost. Wouldn't the OP be deemed to have acquired the asset on a 'no gain/no loss' basis, which would have  included an element of indexation in 2003? 

Banking Indexation Allowance through inter-spouse transfers - Part 1 | AccountingWEB

eskbanker

olbas_oil said:

eskbanker said:

https://www.gov.uk/capital-gains-tax/gifts (written from the perspective of the original purchaser) explains that your gain needs to be calculated from the price your husband paid, not the value at the time of the transfer:

If they later sell the asset

Your spouse or civil partner may have to pay tax on any gain if they later dispose of the asset.

Their gain will be calculated on the difference in value between when you first owned the asset and when they disposed of it.

If this was before April 1982, your spouse or civil partner should work out their gain using the market value on 31 March 1982 instead.

They should keep a record of what you paid for the asset.

With disposals up to 2008, one  included indexation when calculating the base cost. Wouldn't the OP be deemed to have acquired the asset on a 'no gain/no loss' basis, which would have  included an element of indexation in 2003? 

Banking Indexation Allowance through inter-spouse transfers - Part 1 | AccountingWEB

That article would suggest that's a possibility but it's not a scheme that I'm familiar with, perhaps others will be able and willing to chip in, either here or over on the cutting tax board, although it could all be academic if the raw data about purchase prices isn't available....