Share dealing - need advice about "bed and spouse"

hashtag3

If helpful, I have done this with my spouse - and the process looked like this and I believe is correct…

• Transfer the stock (NOT sell it) from the US broker to a UK broker where we both have an account. This is necessary for us, as my spouse doesn't have an account with the US broker
• Transfer the stock within the UK broker from my account to my spouse's account
• Spouse sells the stock - for tax purposes, the value of the stock is based on the Section 104 price of the stock in my holding. This is necessary because I have accrued an amount of stock in the same company, so it is part of a S104 holding

The only CGT involved here, is the CGT calculated between the S104 value, and the actual sale price of the stock - as it would usually be calculated. It's a transfer of stock from me to my spouse, not a sale / repurchase, so there's no CGT then.

OliverLacon

https://forums.moneysavingexpert.com/discussion/comment/82107054#Comment_82107054

You are correct in that UBS are difficult to deal with (in my case). I have the account with them due to a company sponsored stock plan for a US company I used to work for. Having left the company (plus it was bought out by another US company) the account restricts me only to sell the currently held shares - and even that is difficult - I have to phone them in New York each time. My intention was to sell a few shares each year up to the value of the CGT allowance (and eventually close the account). Halifax are saying that UBS do not respond to their transfer requests - which seems quite likely to me. Over the last 2 years the value of the stock has increased and my exit plan would take several years - which is not ideal. Also I want to use my wife's CGT (as well as my own) allowance when we sell. I mistakenly thought that the Bed and Spouse arrangement would help - but I now realise that it would not. Based on the advice from responses to this thread, I think my way forward is as follows:

1. Sell (for example 20) shares with UBS.
2. On the same day, purchase an equal amount of shares via Halifax (I have the funds available so I don't need to wait for UBS to send me the proceeds of the sale).
3. My understanding is that there will be no immediate capital gain, so I don't need to report it in my tax return.
4. Later this tax year transfer some of the shares (via Halifax) to my wife's Halifax account.
5. Also during this tax year sell some of the shares in my Halifax account. The gain will be the difference between the historic purchase price (UBS account) and the sale price (Halifax account). If this is less than the current CGT allowance (£3000), I don't have to pay any CGT.
6. My wife does the same as step 5 (again using the historic UBS purchase price for the CGT calculation).

would someone be able to confirm that the steps above are correct?

DRS1

Point 3 just sounds plain wrong to me. You have disposed of an asset in the tax year so if you otherwise have to report CGT on your tax return (gain over £3k or disposals over £50k) then you need to include that calculation in your tax return with all the other CGT calculations (ie the ones from point 5).

If you want to avoid putting your disposals into your tax return you need to keep the total gains under £3k and the total disposals under £50k.

phlebas192

Point 3 does create a disposal for CGT purposes, but the proceeds from the sale of the shares with UBS will be matched with the acquisition cost of the shares with Halifax since the transactions will be on the same day (same applies if the purchase is after the sale but within 30 days). Since the transactions take place close to each other any gain (or loss) is likely to be small, but the disposal will need to be included on your tax return if you need to make a CGT report - typically if you have gains of over £3k or total proceeds over £50k.

DRS1

Quite apart from the bid/offer spread and the dealing costs what happens about exchange rates? Presumably the sale is done in USD and the buy in GBP. Could there not be a difference in exchange rates used to turn the USD into GBP and the rate used by Halifax to say how many GBP you need to buy the relevant number of shares?

Dead_keen

So by selling and buying on the same day no disposal occurs - and therefore no need to include the sale as a disposal in my tax return (as the repurchase cancels it out).

No, there is always a disposal. You have actually sold the shares. So if the thresholds set out elsewhere have been exceeded (including other disposals you have made) then you need to report it.

What is special about the same day matching rules is that the gain or loss is likely to be very low.

OliverLacon

So the UBS sale creates a disposal, but because I repurchased the same amount of the same shares via Halifax on the same day then the HMRC Share Matching rule would mean that notionally those just repurchased shares would be treated as the ones that were actually sold.

The gain (or loss) would be the difference between the UBS sale and the Halifax repurchase price (I'm disregarding any costs incurred for the sake of simplicity). This is the amount that would need to be reported to HMRC for CGT purposes.

If 30 days or more later I subsequently sold any of the shares now held in my Halifax account that gain (or loss) would be the difference between the original purchase price (via UBS some years ago) and the current sale price.

OliverLacon

I'm not a great fan of AI, this is what Google came up with as an answer to this question:-

If I sell shares via my US stockbroker and then buy the same amount of shares back via my UK stockbroker, how would I calculate UK Capital Gains Tax?

.

How Your Calculation Works

Because you are repurchasing the shares immediately via your UK broker, your sale via the US broker will trigger either the Same-Day Rule or the 30-Day Rule.

If You Buy and Sell on the Same Day

• Gain / Loss Calculation:

Disposal Proceeds (USD converted to GBP)} - Repurchase Cost (GBP)

• Effect: The historic acquisition cost of your original US shares is not used.
• The gain or loss is simply the price difference (and currency fluctuations) between your US sale and UK repurchase on that day.

DRS1

You mentioned that the shares were acquired through a US stock plan of your employer. Did you by any chance pay UK income tax on the acquisition of the shares?

OliverLacon

It was a scheme where a percentage of my salary was deducted each month and used to purchase the shares. I think the shares were actually allocated once every quarter. I don't think there was any discount on the share price - possibly they used the lowest market price for the stock during the quarter. No tax paid at purchase time.