CGT - Transfer to spouse

[ReformedCharacter]

I am in the process of transferring shares from my unsheltered share trading account to both my and my wife's ISAs. Am I correct in interpreting the CGT rules that sales between spouses are exempt from CGT? If so, how do inform HMRC that I have sold x and re-bought x in my wife's ISA, is it just a matter of noting it on my SA?

Thanks for any guidance.

RC

[genou]

I am in the process of transferring shares from my unsheltered share trading account to both my and my wife's ISAs.

To achieve that you have to go in to cash. Which means that you need to have adequate documentation that the shares were your wife's before you sell them. An email stating that you hold <x> shares on bare trust for her, followed by a reply to say "sell and give me cash" would be in order. For the pennies involved, I would sell her <x> separately from your own tranche, just to have clear 3rd party records.

Am I correct in interpreting the CGT rules that sales between spouses are exempt from CGT? If so, how do inform HMRC that I have sold x and re-bought x in my wife's ISA, is it just a matter of noting it on my SA?

RC

Spouse to spouse is deemed to occur at no-gain/no-loss. So your wife is selling <x> shares with your original base cost. For you to do the arithmetic of how much you can transfer to stay within her CGT allowance ( or she can pay tax, or claim a loss if it's what happens ). Spouse transfers do not need to be reported, but you need a record in case awkward questions are asked.

[doug2500]

I use a joint account for this very thing, it's a handy thing to have.

It's liked to an account in my name so I just request a transfer from one to the other saying something like 'this is to be considered a gift to my wife'. It generally takes a couple of days, then 2 or 3 more for settlement and costs nothing.

[DrFfybes]

If you both use the same platform, it might be simpler to transfer the unsheltered assets in specie between you and then sell within your own accounts. Then the only record required is your original purchase price wih applies to both sales.

Paul

[ReformedCharacter]

I am in the process of transferring shares from my unsheltered share trading account to both my and my wife's ISAs.

To achieve that you have to go in to cash. Which means that you need to have adequate documentation that the shares were your wife's before you sell them. An email stating that you hold <x> shares on bare trust for her, followed by a reply to say "sell and give me cash" would be in order. For the pennies involved, I would sell her <x> separately from your own tranche, just to have clear 3rd party records.

Am I correct in interpreting the CGT rules that sales between spouses are exempt from CGT? If so, how do inform HMRC that I have sold x and re-bought x in my wife's ISA, is it just a matter of noting it on my SA?

RC

Spouse to spouse is deemed to occur at no-gain/no-loss. So your wife is selling <x> shares with your original base cost. For you to do the arithmetic of how much you can transfer to stay within her CGT allowance ( or she can pay tax, or claim a loss if it's what happens ). Spouse transfers do not need to be reported, but you need a record in case awkward questions are asked.

I'm probably being a bit thick here But if I give my wife the shares and then she asks me to sell them (in order to re-buy them in her ISA), isn't she then liable for CGT?

RC

[scrumpyjack]

You can't 'transfer shares to an ISA'. An ISA subscription must be in cash, which is then used to purchase shares.

Most brokers will arrange to sell your shares and repurchase them within the ISA on a reduced commission and buy/sell spread, but it is still a sale (and an event that may trigger CGT if over limits).

The cgt free transfer of shares to a wife is a separate issue. You can give your wife shares and she can then use the special arrangements brokers offer to sell and repurchase in the ISA. She may incur CGT based on the difference between her sale price and your 'held over' cost price on the share you gave her

[Gersemi]

I'm probably being a bit thick here But if I give my wife the shares and then she asks me to sell them (in order to re-buy them in her ISA), isn't she then liable for CGT?

RC

Yes, she would be liable to CGT. It's only worth doing if she has unused CGT allowance to use up. If you have the unused allowance, then sell and give her the cash to invest.