Capital Gains

[S 8 GRN]

Evening All - I wonder if someone could offer some advice.

I'm about to sell some unit trusts that have been in place for a significant amount of time. I'd rather not pay too much CG Tax.

Is there a way for me to minimise my tax liability by involving my wife? She earns no more than 6k per year.

Thanks in advance.

[HootersGsy]

Both of you have a CGT allowance and interspousal transfers are tax free. What you want to do is move half of the units to your wife so you can use both allowances. If it was near April I'd also suggest selling a portion in each tax year to make the use of two years and two persons allowances but I guess you don't want to wait that long!

[S 8 GRN]

Thanks - being simple ... I need to move the ownership over before I sell them. I can't gift her the cash.

[HootersGsy]

It has been a while since I did any UK tax but yes, I think you would need to transfer ownership first.

[wattsm666]

Yes transfer ownership first. You might also want your wife to make a larger gain if she is a lower rate tax payer, cgt @ 18% rather than you at 28% if you are higher rate.

[jfbrin]

wattsm666 said:

Yes transfer ownership first. You might also want your wife to make a larger gain if she is a lower rate tax payer, cgt @ 18% rather than you at 28% if you are higher rate.

Exactly. So with both your CGT allowances of £22,000 combined, you should only be liable to 18% CGT on gains of up to £47,866 approx if you weight your sale towards your wife's unused allowance assuming you are a higher rate tax payer.

Edited by jfbrin on Saturday 16th August 21:43

[jfbrin]

wattsm666 said:

Yes transfer ownership first. You might also want your wife to make a larger gain if she is a lower rate tax payer, cgt @ 18% rather than you at 28% if you are higher rate.

Exactly. So with both your CGT allowances of £22,000 combined, you should only be liable to 18% CGT on gains of up to £47,866 approx if you weight your sale towards your wife's unused allowance assuming you are a higher rate tax payer.

Edited by jfbrin on Saturday 16th August 21:44

[S 8 GRN]

Many thanks.