Transferring shares to spouse

[snabzter]

In July last year I had a share save mature. I m a higher rate taxpayer and my wife doesn't work so I instructed for the majority of the shares to go to her, with me keeping some. We sold some in August ans September and used up of 2014/15 CGT allowance.

I now have a few hundred shares left in my name and my wife has a fair few thousand. We are looking at keeping them rather than selling them. However, being a higher rate taxpayer I don't want to fill in a self assessment form, if I can help it, for the additional income tax from dividends. The additional tax would be maybe £20-30 per year so it doesn't seem worth the hassle.

Is it possible to transfer my remaining shares to my wife without incurring any tax?

[V40TC]

Higher rate tax payer or not,
you still have your own CGT allowance
do you hold more the 11k in Shares?
or will the dividend take you over this allowance?

[Jockman]

I recently transferred 8% of my entire Company shares to my wife. No tax, no issues.

I used proper advisers rather than my mate down the pub

[walm]

Someone more well versed in this can correct but IIRC you can gift your wife anything since there is no IHT between spouses (and the only tax you have to worry about for gifts is IHT usually, I think).
https://www.gov.uk/tax-sell-shares/what-you-pay-it...

V40TC said:

Higher rate tax payer or not,
you still have your own CGT allowance
do you hold more the 11k in Shares?
or will the dividend take you over this allowance?

No offence but this comment seems very odd to me.
Firstly, the OP isn't worried about CGT he is worried about income tax on the dividends.
Secondly the "11k in shares" is utterly irrelevant even if he were concerned about CGT.
What matters is the GAIN and here dividends are (mostly) irrelevant. Even if you reinvest them, it's just a new investment as if you bought the shares in cash and the divs are treated as income as per usual.

Obviously if he has 11k in shares then right now he is by definition below the CGT threshold but what matters is the value when he sells them and what it cost him to acquire him - GAIN.

And lastly he is asking about transferring the shares which is again absolutely nothing to do with CGT.

HOWEVER - now I am thinking a little more...

Wouldn't it be better to sell the OP's shares now - which would be under the CGT threshold and hence free of tax.
Then give your wife the CASH and she can reinvest into shares but at a much higher starting value.

Otherwise if you just give them to her, when she comes to work out her CGT she has to use the ORIGINAL cost (i.e. cost to the OP) rather than the value of the shares at the time they were transferred....

I think...

[Jockman]

walm said:

Otherwise if you just give them to her, when she comes to work out her CGT she has to use the ORIGINAL cost (i.e. cost to the OP) rather than the value of the shares at the time they were transferred....

I think...

Walm, I believe you are correct.

A spouse is deemed to have always owned the shares on transfer. It is a special arrangement AFAIK

[megaphone]

Are you both using your ISA allowances? If not switch them into ISAs, you've missed the boat for 2014-15. £30k between you for this year.

And gifting shares is pretty straight forward, just use a Stock Transfer form.

[snabzter]

Thanks a lot for all the replies.

I think I will probably sell them then use the money to buy more shares in my wife's name, that way using some of my CGT allowance and reducing her potential CGT in the future. They are nearly 600% up on the option price so it would be useful for me to sell then to re-purchase.

The dividends are not too bad so we would like to keep them coming in just now with a view to selling some in a few years to pay the mortgage off at the end of our current fixed rate deal.

[thepeoplespal]

Long time ago was this not called "Bed & Breakfasting". Which IIRC was outlawed for using up CGT allowance for the year, unless shares bought are an entirely different stock.

Probably wrong end of stick on my part, but worth investigating before carrying out an transaction.

[walm]

thepeoplespal said:

Long time ago was this not called "Bed & Breakfasting". Which IIRC was outlawed for using up CGT allowance for the year, unless shares bought are an entirely different stock.

Probably wrong end of stick on my part, but worth investigating before carrying out an transaction.

Again I am not an expert but I thought B&B was only for yourself.
i.e. you sell them to use up your CGT allowance and buy them right back.

But in this case the OP is selling for cash.
Then in a completely separate transaction, he is gifting his wife some cash.
She then chooses to invest that cash into the original stock.

I think it's different to B&B.