Shares in sole name treated as joint for CGT?

sausage_time · 18 April 2017 at 8:23PM

I need to sell some shares in my sole name quickly, but just realised that this will tip me over CGT limit. Is there a way I can assert that my spouse can share the gain (because in reality she is a beneficiary of the proceeds - that will end up in our joint account). I won't have time to do the paperwork to transfer them, so this will have to be a paper exercise. Any pointers!

Credit-Crunched · 18 April 2017 at 8:29PM

sausage_time wrote: »

I need to sell some shares in my sole name quickly, but just realised that this will tip me over CGT limit. Is there a way I can assert that my spouse can share the gain (because in reality she is a beneficiary of the proceeds - that will end up in our joint account). I won't have time to do the paperwork to transfer them, so this will have to be a paper exercise. Any pointers!

Sadly no, even transfer to wife's names would trigger a CGT issue. If only youd have done this a few weeks ago!

IanManc · 18 April 2017 at 8:41PM

Credit-Crunched wrote: »

Sadly no, even transfer to wife's names would trigger a CGT issue. If only youd have done this a few weeks ago!

The gov.uk website says:

You don’t pay Capital Gains Tax on assets you give or sell to your husband, wife or civil partner, unless:
you separated and didn’t live together at all in that tax year
you gave them goods for their business to sell on
The tax year is from 6 April to 5 April the following year.
If they later sell the asset
Your spouse or civil partner may have to pay tax on any gain if they later dispose of the asset.
Their gain or loss will be calculated from when you or they first owned it.
If this was before April 1982, your spouse or civil partner should work out their gain using the market value on 31 March 1982 instead.
They should keep a record of what you paid for the asset.

sausage_time · 19 April 2017 at 8:07AM

I understand that the CGT liability would transfer, but that would let us "share" the gain and keep it below our allowances. So, back to my question. Is there a way I can assert joint ownership (or beneficiary) of the shares without formally making that transfer before the sale?

Biggles · 19 April 2017 at 8:35AM

How do you hold the shares: nominee a/c, paper?

sausage_time · 19 April 2017 at 8:57AM

Biggles wrote: »

How do you hold the shares: nominee a/c, paper?

Nominee account in this case.

AndyT678 · 19 April 2017 at 9:12AM

You need your wife to open her own nominee account then transfer some shares to that before selling them.

Malthusian · 19 April 2017 at 9:13AM

Ring whoever administers your nominee account and ask them what they need. It should be a share transfer form which looks similar to this one. You fill in your name and address under "in the name(s) of" and then in the box next to "the person(s) to whom the security is transferred" you fill in both your names.

*edit* AndyT678 makes a good point I'd overlooked, you will probably also need an application form to open another account with your nominee provider in joint names.

sausage_time · 19 April 2017 at 9:27AM

Malthusian wrote: »

Ring whoever administers your nominee account and ask them what they need. It should be a share transfer form which looks similar to this one. You fill in your name and address under "in the name(s) of" and then in the box next to "the person(s) to whom the security is transferred" you fill in both your names.

*edit* AndyT678 makes a good point I'd overlooked, you will probably also need an application form to open another account with your nominee provider in joint names.

Thanks! And therein lies the problem. Sadly I don't have time to work though this (need to sell in the next day or so), and was wondering if I can make some kind of nomination "off-line". I had thought this was possible, but I can't find any reference to it anywhere.

bowlhead99 · 19 April 2017 at 10:09AM

Get a solicitor to create a trust instrument that transfers half your shares into a bare trust in favour of your wife of which you are the trustee.

Then prepare for an argument with HMRC when you assert that the shares sold belong equally to you and your wife's bare trust even though:

- the broker sales paperwork says they belong only to you and do not mention a truss arrangement;

- the company registrar does not have any record of the trust being an owner of the shares at any point;

- the general terms and conditions of your broker agreement have already had you confirm that you are the sole owner of all the shares in the account you operate and that they are not held as nominee or trustee on behalf of anyone else unless you specifically open an account as nominee or trustee with them or a joint account and deal through those separate accounts.

So, all the evidential paperwork for the transaction would point to it being a solo disposal.

It takes a few days to settle a share disposal on the market anyway. If the broker sold your shares in the market tomorrow, he would get the cash for them from the buyer on Monday at the earliest. Then another few days for a free bacs transfer to your bank account unless you are desperate to get the cash quicker and pay for same day transfer.

So, an alternative option would just be to get a loan. Subject to status, Tesco or Sainsbury or both would lend you £25k at about 3% APR, you'd get it in your bank next week, meanwhile do a proper transfer and sell having avoided more CGT, use the proceeds to settle the loan after only suffering a bit of interest at a low rate.

Biggles · 19 April 2017 at 1:24PM

sausage_time wrote: »

Sadly I don't have time to work though this (need to sell in the next day or so)

If you're brokers are up to scratch, you could do this inside a day.

Call them, ask them to open a joint account (they'll need ID etc from your wife for that) and then to transfer all your holdings to the joint account. Better still, if they will do it, is just convert your existing account to a joint account. Either way, all your gains will be shared at the point shares are sold from the joint a/c.

NB (just to confirm, having seen many misapprehensions on the subject) you will have gains of over £11,300, not just proceeds of over £11,300?

Shares in sole name treated as joint for CGT?

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