Transferring shares to spouse to reduce CGT

I'm thinking of transfering ownership of some shares from my name to my partner's name, to take advantage of 2 sets of CGT allowance.

Does anyone know if, for CGT purposes, the transferee's share purchase price will be set at what I originally paid...or what the shares are worth upon transfer?

Depending on what happens to the share price before the year is up, I may just end up doing a B&B instead...but if I'm lucky, it may be worth it to do both.

Thanks for any advice,

Scotty.

Re: maximising CGT allowance on shares

Scotty said:

Does anyone know if, for CGT purposes, the transferee's share purchase price will be set at what I originally paid...or what the shares are worth upon transfer?

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The spouse to whom the shares are transferred inherits the original acquisition price. They are not repriced to the current market value at the time of the transfer. You probably already know that the transfer is exempt from stamp duty and should be possible to transact at zero cost by going through the relevant company's registrar to get a stock transfer form. In some cases they may charge a small administration fee but Computershare never charged this when I transferred First Active shares to my wife just before the UB/RBOS takeover for example. It's a useful way to avail of the annual CGT allowance of the spouse who would otherwise not use this up.

My understanding is that shares only transfer at their currenmt market value to the other spouse in the case of death.

See section 6.1 of [broken link removed] (underlining is mine):

The transfer of assets between spouses living together in a year of assessment are not treated as disposals for Capital Gains Tax purposes. Instead, the spouse receiving the asset is treated as having received the asset(s) in question at the same time and for the same consideration as the transferring spouse originally acquired it.

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As ever the relevant TCA legislation is the final arbiter but the above summary seems clear enough. After the transfer of shares to my wife mentioned earlier I submitted a CGT return to Revenue including detailed calculations which had her transferred shares with the same acquisition price that originally applied when I held them and they accepted these calculations.

Correct, S. 1028 (5) and (7) are the relevant pieces of legislation... sold at no gain-no loss for husband, with wife taking on original base cost and costs of acquisition:

"(5) Where in any year of assessment in which or in part of which the married woman is a married woman living with her husband, the husband disposes of an asset to the wife, or the wife disposes of an asset to the husband, both shall be treated as if the asset was acquired from the spouse making the disposal for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the spouse making the disposal;

(7) Where subsection (5) is applied in relation to a disposal of an asset by a husband to his wife, or by his wife to him, then, in relation to a subsequent disposal of the asset (not within that subsection), the spouse making the disposal shall be treated for the purposes of the Capital Gains Tax Acts as if the other spouse's acquisition or provision of the asset had been his or her acquisition or provision of the asset."

Thanks for the confirmation. Is there an easy way to look TCA stuff like this up when cross checking the summary guide information against the underlying legislation? I am not a tax professional and am just curious as to the source of the TCA info. I know that the Revenue tax briefings are online and have further clarifying info but they have never been that easy to search and access randomly as opposed to trawling through them hoping to hit on relevant info. Thanks.

I'm a tax professional so have all this stuff to hand - my old student notes, TaxFind (great search engine), hard copy of legislation, etc.

This is a link to the TCA97... [broken link removed]
It's also available in pdf format from the Revenue website.

With regard to searching and accessing this stuff I don't know of any easy way, sorry! I know myself from doing the tax exams (you can bring in just the legislation) it's often very difficult to find the relevant section!

OK - thanks again for that info.

No probs.

Forgot to say, the Tax Briefing supplement (last published in May '04) is very good... has good indexes to what's in the various tax briefings.

Thanks everyone (and sorry for originally posting in the wrong forum Clubman).

I should have made this clear, but when I said "partner" I just meant girlfriend (well...not "just" but you know what I mean).

I know tranferring through a broker costs 25 euro + stamp duty...I'm assuming this route will still mean she'll inherit the original acquisition price from Revenue's point of view?

thanks,

Scotty

Oh - the rules outlined above only apply to married couples/spouses. If you are not married then you can transfer the shares to her name but you will be charged stamp duty and, as far as I know, it will trigger a CGT liability for you and a Capital Acquisitions/Gift Tax liability for her and the acquisition price of the shares after transfer will be the market value on the day that they are transferred.