Transfer of shares - tax to pay?

HappyasaHermit

My father has in excess of £200,000 worth of shares that he wishes to have transferred into my name - his daughter. These will continue to be held, not sold. Are there any tax implications on transfer to me?

InvesterJones

If he's giving them to you and lives another seven years, no. 

Edit: I thought not, but just read something about it being considered market value at the point of gifting, so he may also owe CGT.  See https://www.rossmartin.co.uk/capital-gains-tax/4195-cgt-gifts for example

Hoenir

It's a disposal so Capital Gains Tax applies.  You are a connected person for the purposes of tax legislation. CGT will be assessed on the market value at the date of the transfer. 

Keep_pedalling

Are these shares you would have chosen  to buy yourself? If we are talking individual company shares we are talking high risk investments. The better option would be for him to sell pay off his CGT liability and give you the remaining proceeds in cash for you to invest in something more suitable for you. 

Aretnap

As above, the tax implications are exactly the same as if he sold the shares at current market value and gifted you the cash.

So he would have to pay capital gains tax on any increase in the value of the shares since he bought them, based on the market value at the time of the transfer. Additionally if he were to die within 7 years of gifting them to you they would be treated as still part of his estate for inheritance tax purposes, so if his other assets are large enough to put him over the IHT threshold there could be IHT to pay as well.

The gift itself is not taxable, subject to the rules around inheritance tax.

Agree it's with asking if you actually should hold £200,000 in shares in what sounds like a small number of companies, or a single company? A good way to think about it is: if you had £200,000 in cash, what would you do with it? Buy shares in that particular company, or do something else? If the answer is do something else then you would be better off with the cash than the a safe.

leosayer

You should also be aware of your future tax liabilities.

If you sell the shares in the future then any gain above the value on the date the shares transferred to you will need to be assessed for capital gains tax. 

Also, any dividend income will be liable for income tax. 

Were the shares a gift or was it part of another arrangement?