How to correctly gift shares to spouse, CGT changes

scoobyjones1

Reed_Richards said:

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.

Yes, @Reed_Richards, What @eskbanker says is good advice and I will most probably do that in future but I feel the same as you. When you marry everything is really joint owned and my will leaves it all to my wife anyway, after gifts and expenses. I would have thought it quite possible to gift some shares to your spouse, even if you already bought them, or inherited some previously or even before you were married...and do this by declaration, a letter, a statement of some kind.
If I buy some Tesla shares I am using OUR money anyway at the end of the day, not just mine. Most married couples have joint finances or even joint bank accounts. 

HMRC does give you (form 17) a way to change the split of joint owned property...and on that form you have to attach a "declaration" to say who owns what percentage of the asset. But I can find no way of declaring who owns what proportion of stocks and shares. I suspect we could just make our own "declaration" within our book keeping.

I wonder if anyone here has actually done this...or would know a qualified financial advisor who actually knows this to be true? 

Malthusian

Providers share information with HMRC - which won't include any piece of paper you have signed to say that money in your name has been gifted to your wife.

Providers are also required to know whether an account is in trust, and who for, under anti money laundering regulations.

All of which means that you could potentially have an uphill struggle persuading HMRC that an account belongs to your wife when it has your name on, and has always had your name on.

I wonder if anyone here has actually done this...or would know a qualified financial advisor who actually knows this to be true? 

A financial advisor would just tell you to transfer the shares in-specie to your wife's account. 

Reed_Richards

Malthusian said:

A financial advisor would just tell you to transfer the shares in-specie to your wife's account. 

But that is because it's the guaranteed safe option.  It also could involve a fair bit of time and trouble, although seemingly not in this case.  But nobody who has posted here yet appears to be sure whether it's really necessary.  

Hoenir

Reed_Richards said:

Malthusian said:

A financial advisor would just tell you to transfer the shares in-specie to your wife's account. 

But that is because it's the guaranteed safe option.  It also could involve a fair bit of time and trouble, although seemingly not in this case.  But nobody who has posted here yet appears to be sure whether it's really necessary.  

Beneficial interest will be with whoever's name is on the holding. Without a proper documented audit trail assets could endlessly be passed backwards and forwards. 

wmb194

Reed_Richards said:

Malthusian said:

A financial advisor would just tell you to transfer the shares in-specie to your wife's account. 

But that is because it's the guaranteed safe option.  It also could involve a fair bit of time and trouble, although seemingly not in this case.  But nobody who has posted here yet appears to be sure whether it's really necessary.  

When you are inviting the Eye of Sauron to look at you the best idea is to keep it as simple, uncomplicated and uncontroversial as possible.

scoobyjones1

Hoenir said:

Reed_Richards said:

Malthusian said:

A financial advisor would just tell you to transfer the shares in-specie to your wife's account. 

But that is because it's the guaranteed safe option.  It also could involve a fair bit of time and trouble, although seemingly not in this case.  But nobody who has posted here yet appears to be sure whether it's really necessary.  

Beneficial interest will be with whoever's name is on the holding. Without a proper documented audit trail assets could endlessly be passed backwards and forwards. 

Well this would be documented, a declaration, dated and recorded. And it would not be endless, only once, in order to use 2x allowances. However, we are going to just play it safe and use in specie gifts from spouse to spouse within the same provider accounts. 

scoobyjones1

wmb194 said:

Reed_Richards said:

Malthusian said:

A financial advisor would just tell you to transfer the shares in-specie to your wife's account. 

But that is because it's the guaranteed safe option.  It also could involve a fair bit of time and trouble, although seemingly not in this case.  But nobody who has posted here yet appears to be sure whether it's really necessary.  

When you are inviting the Eye of Sauron to look at you the best idea is to keep it as simple, uncomplicated and uncontroversial as possible.

We want as little to do with Sauron as possible! We are going to use the spouse to spouse, in specie transfer which will be of some benefit this year, but hardly at all next year. These vicious threshold cuts will discourage investors and savers, lose business for providers and create massive backlogs for HMRC who are already over stretched.
The only winners will be financial advisers...in the short term.

eskbanker

scoobyjones1 said:
These vicious threshold cuts will discourage investors and savers, lose business for providers and create massive backlogs for HMRC who are already over stretched.

The only winners will be financial advisers...in the short term.

Which 'vicious threshold cuts' impact savers?

The reduced CGT and dividend allowances can obviously affect investors, although the £20K annual ISA allowance should mitigate that for all but the wealthiest, and those who have sufficient assets to engage financial advisers are arguably a more suitable population to shoulder a higher burden of taxation than those less well off....

scoobyjones1

eskbanker said:

scoobyjones1 said:
These vicious threshold cuts will discourage investors and savers, lose business for providers and create massive backlogs for HMRC who are already over stretched.

The only winners will be financial advisers...in the short term.

Which 'vicious threshold cuts' impact savers?

The reduced CGT and dividend allowances can obviously affect investors, although the £20K annual ISA allowance should mitigate that for all but the wealthiest, and those who have sufficient assets to engage financial advisers are arguably a more suitable population to shoulder a higher burden of taxation than those less well off....

I'm not here to argue politics and we cannot afford financial advisers. If you have a position of shares built up over many years, maybe an inheritance already subject to a lifetime of taxation then another 40% tax after death, not in a SIPP or ISA, to cut the threshold from 12k plus to 6 to 3 is vicious in my opinion. Especially when they promised not to, only 3/4 years ago. Add to that the cuts to thresholds for tax on dividends and interest from 2k to 1k to 500 and this will discourage many savers and make life more difficult. They are doing this to raise more tax revenue of course. Add in the freeze on Income Tax thresholds, pushing many more people into tax and higher rate tax, then they certainly will have a bumper take this year and even more so next. We are being taxed more than we were 70 years ago and it's all a bit under the radar for many people. You may be aware and no doubt you have planned ahead...but that's not most folk!

eskbanker

scoobyjones1 said:
Add to that the cuts to thresholds for tax on dividends and interest from 2k to 1k to 500 and this will discourage many savers and make life more difficult.

But my point was that there hasn't been any change to interest thresholds, just CGT and dividend ones, so I don't follow your argument about savers, as opposed to investors?

The rest of your post was largely a strawman - nobody was discussing IHT or claiming that overall tax take isn't increasing, and I'm not disputing that fiscal drag is an issue, but that's not a 'vicious threshold cut'....