How to use your wife s CGT allowance?

[SonicHedgeHog]

It seems that it’s possible to gift shares to your husband/wife and then sell them to take advantage of their CGT tax free allowance. I’ve found lots of information telling me what to do but nothing explaining HOW to do it. Can anyone please advise?

Edited by SonicHedgeHog on Tuesday 18th November 12:06

[Jon39]

SonicHedgeHog said:

It seems that it's possible to gift shares to your husband/wife and then sell them to take advantage of their CGT tax free allowance. I ve found lots of information telling me what to do but nothing explaining HOW to do it. Can anyone please advise?

If you have a certificate(s) for the shares that you want to transfer to your wife, then you simply need to complete a Share Transfer Form, then send it with the certificate(s) to the appropriate registrar.
I think for the value question you put GIFT, meaning no Stamp Duty is payable.
The form can be downloaded from the registrar's website, or requested from the registrar.

If you hold those shares with a broker, then I suppose you need to speak to them.

Hopefully you are making good use of (stocks and shares) ISA, then taxation need not even be thought about.

The CGT free allowance has recently been gradually reduced to now being effectively nothing and CGT is these days also charged on inflationary gains. It all points to little encouragement to have any ambition to start businesses, or achieve a better financial position.
It has been clearly shown in the past, that increasing CGT, results in fewer transactions and less money being received by the Treasury.

[CharlesElliott]

You can gift the shares, just transfer them to their ownership (ie you both need a brokerage account).

The cost basis of the shares is deemed to be your cost basis for the shares - if they cost you £1000, then they are deemed to have cost your partner £1000. (Lookup Section 104 holdings if you have multiple purchases of the same share at different prices).

Then your partner sells the shares, and they utilise their CGT allowance based on the increase above the cost basis. they need to declare the gain to HMRC.

[gotoPzero]

We did this recently via iWeb. There is a specific form you fill in to gift them over to spouse. Took about a week.

I then got a confirmation and they showed up on my account. IIRC as it was iWeb to iWeb there was no charge.

I could then sell the shares and make use of the 3k TFA.

[The Leaper]

I split a shareholding 50/50 between me and my wife several years ago when the CGT allowance was £12,300 each, so it was much more meaningful to do it then than now.

One problem was that the shares were in a USA based company and so they were traded on the NYSE, and to transfer ownership the USA based share administration company required me to complete what's called a "Medallion Signature Guarantee". It is something rarely seen in the UK and it proved a problem to find a company here to do this, but eventually I found one. The MG was surprisingly expensive!

R.

[gotoPzero]

I just had to do a W8-BEN to move some META from Mrs to me. I had done one in the past but it had expired.

[Panamax]

Some caution is called for. Yes, gifts to spouse are CGT free and the spouse takes over your base value (cost of acquisition). However, simply shunting something into spouse's name which they immediately sell can fall foul of HMRC's anti-avoidance rules. In other words, it's obvious you've inserted a step in the process (transfer to spouse) which has no purpose other than to avoid tax. This is based on a case called Ramsay v IRC (1981) where inserting an unnecessary step was found to be a sham.

If, say, you own 1,000 shares then by all means transfer them to spouse.
He/she should then own them for a while. Let's say several months as a minimum, perhaps receiving the dividends.
And then it's best if he/she doesn't just sell them all in one go but retains part of the holding until, say, the following year.

In other words it needs to be a "genuine gift to spouse" not just "selling through the spouse's name".

[Panamax]

OP - you don't need to even think about what W-8BEN means unless you've got direct holdings in USA companies. Just keep it simple.