Share dealing - need advice about "bed and spouse"

OliverLacon

I have a number of shares of a US company held in my US (UBS) share dealing account. I'd like to transfer some of the shares to my wife's UK Halifax share dealing account. If I sell (for example) 20 of the shares via UBS and on the same day my wife buys 20 of the same shares via her Halifax account - what would be the tax implications? Am I correct in thinking that due to the "bed and spouse" rules there would be no tax implications at all - i.e. I would not have to declare any Capital Gains due to the original US sale?

InvesterJones

Surely you'd have to transfer in order to transfer. Not sell.

dunstonh

Bed and spouse is not a term I've come across before and I don't believe it exists. It wouldn't be an accurate description either, as you would not sell the asset and transfer the proceeds to the spouse. You would transfer the asset to the spouse, who would then sell it.

Am I correct in thinking that due to the "bed and spouse" rules there would be no tax implications at all - i.e. I would not have to declare any Capital Gains due to the original US sale?

On the basis that Bed and Spouse doesn't exist and your description is to sell the shares, but under your ownership, then you would have to declare capital gains tax.

The key with inter-spousal transfers is that the asset is transferred.

OliverLacon

"…."Surely you'd have to transfer in order to transfer. Not sell"

I'm having trouble transferring shares from UBS to Halifax. I'm looking for a way to transfer the shares without incurring CGT

If I sell 20 shares via UBS and then buy 20 of the same shares via my own Halifax account - would I have to declare any gain? I could then transfer them from my own Halifax account to my wife's Halifax account.

OliverLacon

https://calchub.uk/glossary/bed-and-spouse/

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82106543#Comment_82106543

Did you read the description of this "bed and spouse" thing? If so why do you think "that due to the "bed and spouse" rules there would be no tax implications at all - i.e. I would not have to declare any Capital Gains due to the original US sale". In the description it is clear that to achieve that you would have to stay within the £3k annual allowance or make a loss on the sale.

UKTaxHelper

Depends which version you do. Your wife buying is a different person, so nothing gets matched and the full gain crystallises on you there and then. Buying them back in your own account within 30 days does get matched to that purchase, so almost no gain shows now and your old cost carries on in the pool.

EthicsGradient

From your link, the crucial bit is that you only sell what you can without paying CGT, by using the £3k allowance; the spouse can buy it to continue your joint investment in it.

one spouse sells an asset (such as shares or a fund) standing at a gain or loss, crystallising that gain or loss and using their own annual exempt amount

sausage_time

I moved the discussion over to this forum.

As above comments, you need to transfer some shares to your spouse (not sell then buy). Doing this would effectively double your combined CGT allowance to a total of £6k per annum.

In the past ETrade and Schwab have allowed us to open additional spouse or joint accounts (moving to a joint account achieves a similar result). No idea if UBS will be as helpful.

Dead_keen

Bed and spouse is not a term I've come across before and I don't believe it exists

I think it has been around since 1998 or so. The idea is for a married couple to keep the same economic interest in the shares but utilise each other's annual exemptions. To do that the shares had to be sold in the market by one spouse and the same number of shares bought by the spouse at the same time. Economically, you'd lose the bid-offer spread, stamp duty (if UK shares) and dealing fees but with (i) a high annual exemption, and (ii) income tax rates applying to CGT, it was a fantastic idea. In those days it might be a simple call to your broker to make sure both sale and purchase happened at the same time and with minimal spread.

I'm having trouble transferring shares from UBS to Halifax. I'm looking for a way to transfer the shares without incurring CGT

If I sell 20 shares via UBS and then buy 20 of the same shares via my own Halifax account - would I have to declare any gain? I could then transfer them from my own Halifax account to my wife's Halifax account.

If (i) you don't want to wait for a transfer, (ii) have enough cash, and (iii) the difference between buying and selling price of the shares (and two lots of dealing fees) doesn't worry you, then just sell in UBS and buy in Halifax at the same time. The same day matching rules will apply and you will get a capital loss (for the spread and dealing fees) or if you are lucky a capital gain (because the share price went down while you ummed and ahhed about clicking the right buttons). This disposal and gain / loss would be reported in the normal way.

You could also sell now, wait for the cash to arrive, transfer the cash to Halifax, buy in Halifax and provided this is done within 30 days (and you don't buy / sell other shares of the same class in the same company) the only gain or loss would be based on the difference between these two sales and purchase price (and dealing costs and exchange gains or losses). Utilising the 30 day rules means you do not need extra cash but does increase the chance of winning or losing because of share price movements. Again, it is reported as normal.

poseidon1

You say you are having trouble transferring from UBS nominees to Halifax. Is this a problem at the UBS end or ( more likely) a reflection of Halifax's shortcomings in trying to handle a cross border transfer of a US holding?

As indicated in the article below the choice of UK broker is important. They need to be accustomed to handling these types of transactions, so with all due respect to Halifax they would not be my choice,

https://wise.com/gb/blog/transfer-us-shares-to-uk-account

Seems to me you should be having a discussion with brokers like Interactive Brokers given its diverse international client base, and of course you get to retain the holding and dividends in their original US denomination which Halifax cannot do.

In any event soldiering on with your current UBS arrangement is clearly neither convenient or cost effective as demonstrated by your past posts, so getting your shares onto an appropriate UK platform I would treat as a priority.

Once held on a UK platform, you can easily transfer what you want to your wife, or indeed bed and breakfast into your own ISA although you would lose access to holding and trading the shares in dollar form.