Cutting CGT via transfers to spouse

bunking_off · 16 December 2005 at 6:32PM

Not sure if this is best addressed to this board, or the "savings & investments" one.

I've got a SAYE that's due to mature in the spring. The share price has done pretty well, and I'm sitting on an approx £14k gain. However, I've been stung via share prices crashing after the dot com bubble, so want to sell the shares as soon as possible afterwards.

I believe that I could transfer half of the shares to my wife, then she could sell them, so we would effectively get two lots of capital gains allowances, hence not pay any CGT.

Does anyone know what's involved in doing the transfer? Would I have to formally get the company registrars to change the name on the share certificates to satisfy the revenue? If so, can this be done to the registrars directly, or does it have to be done by a broker? If via a broker, does anyone provide a service to sell half, transfer the other half then sell, all in one transaction? It's not so much the cost I'm concerned about, but the timing if I have to carry all of this out sequentially as I don't think I'm the only employee who'll be looking to quickly off-load so the share price might blip down while all this is going on (company is blue chip hence plenty of shares in circulation, but the SAYE was issued when the company was in turmoil hence shares way below fair value so pretty much everyone I know piled in for the max amount permissible).

NeilW · 17 December 2005 at 3:58PM

First you need to exercise your option and purchase the shares. Then you need to lodge a transfer form with the registrars and transfer some of the shares into the name of your wife. The form to do this should be available from the registrars and there should be no stamp duty to pay on the transfer.

The most important section to fill in is the one exempting the transfer from stamp duty. You need to pick category L, the one that says "The conveyance or transfer of property operating as a voluntary disposition inter vivos for no consideration in money or money’s worth nor any consideration referred to in section 57 of the Stamp Act 1891 (conveyance in consideration of a debt etc).". Or in other words a gift.

If your registrar can't send you a stock transfer form, or tries to charge you, then there is one here which should do the trick http://www.capitaregistrars.com/PDFs/stock.pdf.

Once the transfer has been confirmed by the company registrar then you can sell the shares.

With a bit of luck the process for purchasing the shares when the scheme matures should include a mechanism for transfer and/or sale straightaway. It is after all a very common procedure.

Regards

NeilW

Cutting CGT via transfers to spouse

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