How to correctly gift shares to spouse, CGT changes

scoobyjones1

Even though the Gov promised to freeze the capital gains tax threshold until 2025, they have not.
Now, as many who invested in shares are beginning to realise, it is only £6000 and next year a ludicrous £3000.
My question is : 
I understand I can gift some of my shares (Apple, Tesla and the like) which are held in an investment account (not SIPP or ISA, sadly), to my Wife, a day or 2 before I/we sell some, therefore using her £6000 allowance (this year) plus my own £6k, total £12k, against any profits I may have made.
But how do I correctly, in respect to HMRC, gift them to her?
Can we just write a note, or set up a spreadsheet or other book keeping record for my records that say " I hereby gift x amount of shares of Apple (or whichever) to my spouse on such and such date, at original cost to me of $***** and I will hold them in my care until further notice on her behalf". 
Then surely if I have to inform HMRC of any gain over £6k I can attach any records with my tax form or self assessment....if required?
If I had to sell them first to actually transfer the money to her then I would be liable for the full gain, plus other fees, time, hassle and only be able to use half of our allowance.
I am retired, waiting for the state pension (again delayed) and now have no other income.
Thanks for any help. 

Keep_pedalling

As far as I know you will have to transfer the shares into her name before selling. 

Hoenir

One observation. The gift of the shares would be transacted at carrying book cost. This wouldn't provide you with a tax free return. 

Reed_Richards

You could have a look at this but it's still not very clear: https://www.gov.uk/government/publications/husband-and-wife-civil-partners-divorce-dissolution-and-separation-hs281-self-assessment-helpsheet/hs281-capital-gains-tax-capital-civil-partners-and-spouses-2022

One thing, if your wife has her own bank account you probably need to make sure it receives the proceeds from the her half of the share sale.

scoobyjones1

Hoenir said:

One observation. The gift of the shares would be transacted at carrying book cost. This wouldn't provide you with a tax free return. 

Thanks, yes, I get that, the gift of the shares to my wife would be at the price I paid so she would be liable for cap gains tax on the re-sale...however that would mean she can use her allowance and so could I.

What I am trying to establish here though is can I gift some of my shares to her...without actually selling them first which would be no help as then the sale would be liable to cap gains tax anyway.

These US shares are held in an investment account with a UK firm. I do not have any physical share certificates or anything of that nature. It would be a gift between spouses by agreement purely so that we can use both capital gains allowances. I would have thought when you married then both allowances would be linked but of course, they are not.

eskbanker

scoobyjones1 said:

Even though the Gov promised to freeze the capital gains tax threshold until 2025, they have not.
Now, as many who invested in shares are beginning to realise, it is only £6000 and next year a ludicrous £3000.

The freeze was announced in 2021 and the reversal of that policy in 2022, so anyone paying attention will long since have understood the situation?

scoobyjones1 said:

I am retired, waiting for the state pension (again delayed) and now have no other income.

Are you referring to the changes announced in 2011, 2014 or 2017?

scoobyjones1

eskbanker said:

scoobyjones1 said:

Even though the Gov promised to freeze the capital gains tax threshold until 2025, they have not.
Now, as many who invested in shares are beginning to realise, it is only £6000 and next year a ludicrous £3000.

The freeze was announced in 2021 and the reversal of that policy in 2022, so anyone paying attention will long since have understood the situation?

scoobyjones1 said:

I am retired, waiting for the state pension (again delayed) and now have no other income.

Are you referring to the changes announced in 2011, 2014 or 2017?

My question is : 
I understand I can gift some of my shares (Apple, Tesla and the like) which are held in an investment account (not SIPP or ISA, sadly), to my Wife, a day or 2 before I/we sell some, therefore using her £6000 allowance (this year) plus my own £6k, total £12k, against any profits I may have made.
But how do I correctly, in respect to HMRC, gift them to her?

scoobyjones1

Reed_Richards said:

You could have a look at this but it's still not very clear: https://www.gov.uk/government/publications/husband-and-wife-civil-partners-divorce-dissolution-and-separation-hs281-self-assessment-helpsheet/hs281-capital-gains-tax-capital-civil-partners-and-spouses-2022

One thing, if your wife has her own bank account you probably need to make sure it receives the proceeds from the her half of the share sale.

Thanks Reed, but this is the thing.... If I have to sell the shares first and give the cash to my wife then I am liable for capital gains tax and can only use my allowance for that...so there is no benefit in being married in that case. There must be a way, on paper to say she owns some of my shares....without me selling any?

The link you posted is not clear, no...however it does say :

2. Assets held in your name

You’re chargeable to Capital Gains Tax if you dispose of an asset held in your name, unless you’re holding it on behalf of another person, such as your spouse or civil partner.

So that makes me think that you can hold shares in your own account... on behalf of your spouse.

You see what I mean? It's complicated!

eskbanker

scoobyjones1 said:
My question is : 

I understand I can gift some of my shares (Apple, Tesla and the like) which are held in an investment account (not SIPP or ISA, sadly), to my Wife, a day or 2 before I/we sell some, therefore using her £6000 allowance (this year) plus my own £6k, total £12k, against any profits I may have made.
But how do I correctly, in respect to HMRC, gift them to her?

Your wife needs to open an investment account in her name (doing so with the same provider will probably be easiest) and then you need to submit a transfer request to move the relevant portion of your holding into her account, which should be handled as an in specie transfer without entailing any selling.

Reed_Richards

I usually agree with @eskbanker but the HMRC clearly does allow for the possibility of holding an asset in your name on behalf of another person.  When you sell the asset you have to give the proceeds to that person (to establish that it was a bona fide gift).  But for shares there doesn't seem to be any formal mechanism by which you can inform HMRC that you have made a gift.  So although what @eskbanker suggests would work, it's still not clear if it is necessary.

scoobyjones1

eskbanker said:

scoobyjones1 said:
My question is : 

I understand I can gift some of my shares (Apple, Tesla and the like) which are held in an investment account (not SIPP or ISA, sadly), to my Wife, a day or 2 before I/we sell some, therefore using her £6000 allowance (this year) plus my own £6k, total £12k, against any profits I may have made.
But how do I correctly, in respect to HMRC, gift them to her?

Your wife needs to open an investment account in her name (doing so with the same provider will probably be easiest) and then you need to submit a transfer request to move the relevant portion of your holding into her account, which should be handled as an in specie transfer without entailing any selling.

Thank you very much, luckily my wife does have an investment account with the same provider and they have said the same...I asked them already last night if this was an option and so far they have been helpful. This means we could use both allowances totalling £12000 (6k each) on any future sales / gains. I may have to sell / realise some losses on my side now to lower any liability on my side to under £6k. I should have planned things better! Next year will be challenging with the thresholds down to £3k. I think we will both have to open stocks and shares ISAs to wrap some more money up so as not to pay so much capital gains tax.