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Tax due on Share Transfer between family members?
PJ West
Posted: 16 February 2017 12:26:43(UTC)
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Just wondering if any other users have any experience of tax due when transferring shares between family members.

In my own case I became a joint share holder of a batch of blue chip shares(BT, BP etc.) formerly in my father's name with my mother on the occasion of his death.

I now wish to put them back in her sole ownership as I'm doing a tidying up exercise, closing the executor account etc.

I think this counts as a share transfer and tax may be due on at 0.05% on any shares that exceed £1000 in value.

Could be an expensive bit of administration so any advice much appreciated.


Tony Peterson
Posted: 16 February 2017 12:58:55(UTC)
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Put "Nil" in the box marked " consideration" on a transfer form and send the certificate and transfer form to the Registrar.

No tax stamping should be necessary.

The tax is on the amount of money paid, not the market value of the holding.
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BEN WILL on 16/02/2017(UTC)
Tony Peterson
Posted: 16 February 2017 14:51:18(UTC)
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Sorry, one other point, I forgot to mention you also have to sign a declaration on the reverse of the form.

But it is simple (the exempt categories are listed). We have given shares to relatives frequently with no tax problems.
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Mystery Woman on 16/02/2017(UTC)
jeffian
Posted: 16 February 2017 19:46:54(UTC)
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I know this wasn't part of the question and may be irrelevant anyway, but gifting assets back up the generations is counter-intuitive to me. If your mother's estate falls within the IHT range, you will be giving her an asset which potentially gets taxed at 40% when she gives it back to you on her death!
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Tony Peterson on 16/02/2017(UTC)
Tony Peterson
Posted: 16 February 2017 20:14:07(UTC)
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Jeffian

An excellent point. Gifting the income as it arises might be a much better course of action.
PJ West
Posted: 17 February 2017 08:25:43(UTC)
#6

Joined: 27/09/2016(UTC)
Posts: 3

Many thanks for this input-most helpful.
brian jackson
Posted: 17 February 2017 09:23:22(UTC)
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PJ, I think you need to clarify whether the shares were solely in your father's name at the time of his death. Likewise please confirm that the shares are currently held in joint names with your mother and you acting as executors.

If the above case applies then a CGT event will be deemed to have occurred and the executors will need to decide whether the gains are sufficient to incur Capital Gains Tax for the executorship period. I believe that the actual transfer into your mother's name should incur stamp duty of 50p as most legal documents and agreements are assesses in this fashion even where no monetary value applies. As has been commented earlier the rear of the Stock Transfer Form will need to be completed under the relevant section

As a general rule changes in ownership will attract assessment for both stamp duty (whatever form) on value (or if nil value 50p) and potential assessment (not to be confused with liability) for capital gains. The rear of the Stock transfer Form is the easiest way of finding out what can be transferred without incurring stamp duty based on asset value.

Money Spider
Posted: 17 February 2017 16:06:50(UTC)
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This is a topic with which I am not familiar. I've taken a quick scan over some HMRC pages on CGT.

Does this mean that I can transfer some assets (let's say ITs, UTs, shares) to Mrs MS and there will be no CGT liability incurred? However, am I right in thinking that she will 'inherit' whatever my costs for those assets were and that these would then be used for calculating her future CGT liability when she disposes of those assets?

This could be useful to effectively transfer the future income and hence the income tax liability on that income to Mrs MS without incurring CGT (at least not until those assets are disposed of).

I'm just looking for guidance as to whether my thinking on this subject is correct at this point. It would be nice to find a way to 'lose' the CGT liability altogether, but that's hoping for too much, I think. ;-)
Recently Redundant and Retired
Posted: 17 February 2017 16:40:07(UTC)
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When I was working and being issued (a lot of) share options, it was standard practice to split the shares between my spouse and I to double the CGT allowance on disposal.
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Money Spider on 17/02/2017(UTC)
jeffian
Posted: 17 February 2017 18:50:59(UTC)
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"Does this mean that I can transfer some assets (let's say ITs, UTs, shares) to Mrs MS and there will be no CGT liability incurred? However, am I right in thinking that she will 'inherit' whatever my costs for those assets were and that these would then be used for calculating her future CGT liability when she disposes of those assets?

This could be useful to effectively transfer the future income and hence the income tax liability on that income to Mrs MS without incurring CGT (at least not until those assets are disposed of)."

Yes, Money Spider, that is exactly right.
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Money Spider on 17/02/2017(UTC)
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