Discussion
I will be speaking to my accountant about this but...
If I make a gift to a family member, in this case some shares via a stock transfer, will I be liable to pay capital gains tax on any profit the shares have made?
Obviously there is an allowance, this year £10K, for CGT. Can I use previous years allowances as well?
EG. If I bought the shares in 1990 for £1k and they are now worth £20K can I offset the total £19K gain?
If I make a gift to a family member, in this case some shares via a stock transfer, will I be liable to pay capital gains tax on any profit the shares have made?
Obviously there is an allowance, this year £10K, for CGT. Can I use previous years allowances as well?
EG. If I bought the shares in 1990 for £1k and they are now worth £20K can I offset the total £19K gain?
cjs said:
I will be speaking to my accountant about this but...
If I make a gift to a family member, in this case some shares via a stock transfer, will I be liable to pay capital gains tax on any profit the shares have made?
No - what gain have you made?
Obviously there is an allowance, this year £10K, for CGT. Can I use previous years allowances as well?
£10,600 actually,
No, unused allowances from earlier years aere essentially lost if you didn't use them in the year they related to.
EG. If I bought the shares in 1990 for £1k and they are now worth £20K can I offset the total £19K gain?
What do you mean "offset". Offset against what?If I make a gift to a family member, in this case some shares via a stock transfer, will I be liable to pay capital gains tax on any profit the shares have made?
No - what gain have you made?
Obviously there is an allowance, this year £10K, for CGT. Can I use previous years allowances as well?
£10,600 actually,
No, unused allowances from earlier years aere essentially lost if you didn't use them in the year they related to.
EG. If I bought the shares in 1990 for £1k and they are now worth £20K can I offset the total £19K gain?
You bought them for £1,000 and you never sold them - so there is no gain.
It depends on who the family member is. It's all here -
http://www.hmrc.gov.uk/cgt/intro/gifts-inherit-div...
http://www.hmrc.gov.uk/cgt/intro/gifts-inherit-div...
Assuming the share transfer is not inter-spouse (which is done at no CGT gain/loss), then a market value is used for CGT purposes.
This if the shares cost £1400 and they are worth more than £12000 at the date of transfer, you would be liable for CGT @ 28% on the excess as £10600 is the current exempt amount (which is not available for carry forward if unused - use it or loose it!).
David
This if the shares cost £1400 and they are worth more than £12000 at the date of transfer, you would be liable for CGT @ 28% on the excess as £10600 is the current exempt amount (which is not available for carry forward if unused - use it or loose it!).
David
Apologies if this is obvious, but one solution (for a transfer to other than a spouse) would be to split the stock transfer in two so that you use your CGT allowance in 2 tax years. The second transfer could take place from April.
Steven Quas
Hamburg
Steven Quas
Hamburg
Edited by Steven Quas on Wednesday 28th December 18:42
Is gift relief no longer available? I know it used to but maybe that's been stopped now.
That is, you claim gift relief and when the person who receives the shares sells them on, then they pay tax based on the original price of the shares.
So say, you bought the shares for £1000 and gave them to a relative when they were worth £20,000 then no tax is paid.
When that person sells them on but say they are now worth £30,000 then that person pays tax based on a £29,000 chargeable gain.
That is, you claim gift relief and when the person who receives the shares sells them on, then they pay tax based on the original price of the shares.
So say, you bought the shares for £1000 and gave them to a relative when they were worth £20,000 then no tax is paid.
When that person sells them on but say they are now worth £30,000 then that person pays tax based on a £29,000 chargeable gain.
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