Transfer of shares to spouse to avoid CGT

[Pondlife]

Pushing my luck no doubt but don't ask, don't get.

Based on the linky below it seems it's allowable to gift shares to a spouse without the need for CGT.
HM Revenue & Customs: Capital Gains Tax on shares: the basics

If this is the case, is it possible to use both husband's & wife's CGT allowance for a single year when disposing of shares.

Eg. Husband/wife's Employee share scheme comes to maturity but if they exercised all the options they'd have to pay CGT. Can they therefore buy the lot at the option price, gift some to their spouse, who can then sell on and utilise both their CGT allowances?

It sounds dodgy but can't see anything that says it's no go.

Anyone?

NLUKnote: No I haven't bothered searching.

[geoff from contracta IOM]

Is that a signature mocking tax mittigation I see ?

[Pondlife]

Is that a signature mocking tax mittigation I see ?

It's mocking the stupid questions that were to be used to determine if you were a real business.

[Maslins]

You mention share scheme which makes me think you're talking about a small holding in a big company, rather than who owns the shares in a typical contractor company?

One issue (there may be others) would be the availability of entrepreneurs relief. If you're talking a 0.001% shareholding in Barclays/Tesco/whatever, then this is likely irrelevant.

However, if you're talking a big share of a much smaller company, bear in mind you need to own the shares for at least 1 year to get entrepreneurs relief. This is one reason why it's rarely a good idea to shift 50% of a contractor company's shares to a spouse just before liquidation. Sure, you may get 2 x annual exemptions, but that may be eliminated by paying 28% CGT rather than 10% (due to losing benefit of ER).

[Pondlife]

You mention share scheme which makes me think you're talking about a small holding in a big company, rather than who owns the shares in a typical contractor company?

Correct. Employee share scheme for bank/insurance type company

[northernladuk]

It sounds dodgy but can't see anything that says it's no go.

Anyone?

You will look good in stripes!

NLUKnote: No I haven't bothered searching.

You lazy so and so. Well I aint seaching it for you, nope, not me... ever...

EDIT. Couldn't find anything relating to this in a seach

[Pondlife]

You will look good in stripes!

They are very flattering apparently.

From HMRC linky

Giving shares to your spouse or civil partner

You don’t pay Capital Gains Tax when you give (or otherwise dispose of) shares, to your husband, wife or civil partner, providing both of the following apply:

you've lived together for any part of the tax year in which you made the gift
the gift isn't ‘trading stock’ (trading goods bought for resale)

When your husband, wife or civil partner later sells or disposes of the shares, they may have to pay Capital Gains Tax. It's useful to keep a note of what the shares cost you. Your spouse or civil partner may need this to work out their Capital Gains Tax when they dispose of them.

The above would imply it's legit but I cannot believe it is so simple.

[Maslins]

It's legit...(but normal caveat) worth discussing with your accountant, just in case there's some reason why in your specific case it's a bad idea. My example above re entrepreneurs relief is a fairly common one.

[Nathan SJD Accountancy]

I can't see an issue with it from the information provided.

It is a good way to reduce the capital gains tax assuming that the person who gives the shares to their spouse is a higher rate tax payer or and has other gains during the tax year that have utilised their annual exemption.

This then allows the spouse to utilise their annual exemption and (assuming they are not a higher rate tax payer) pay capital gains tax at 18% (instead of 28% for higher rate payers).

It is worth discussing with your accountant though, as they may know other reasons why you personally should not do it.

[Nathan SJD Accountancy]

Almost didn't mention it, but there are different tax implications depending on whether the shares are 'Approved by HMRC' or not. Definitely worth speaking to your accountant about if you are considering it.