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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15950
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Hello. I have a share save plan which will be liable to CGT.

Customer Question

Hello. I have a share save plan which will be liable to CGT. I am a higher rate tax payer, my wife is basic rate. I understand I can switch some or all of the holding to her to mitigate cgt.

In calculating the liability, does the amount invested get split accordingly eg

I invest £17,500
Have 3702 shares
Overall gain is £26,000
Less £10,900 allowance
I would pay 28% of £15,100 = £4,428 ...or

Say split shares 50/50
Does the 17,500 invested go in both pots or just one?

Thank you

If I spl
Submitted: 4 years ago.
Category: Tax
Expert:  TonyTax replied 4 years ago.

Hi.

Is this a private share save plan or were the shares acquired through a Save As You Earn Scheme operated by your employer?

 

If the shares were acquired through a SAYE scheme, you have several options for mitigating tax which you can read about here. There is nothing to stop you transferring some or all of the shares to your wife before you sell them in order to get the benefit of a second CGT exemption of £10,900 and possibly the lower rate of CGT of 18%. If you split the holding on a 50:50 basis the cost for each of you and your wife of your respective holdings will be £8,750. The cost has to be divided proportionately.

 

I hope this helps but let me know if you have any further questions.

Expert:  TonyTax replied 4 years ago.
My last post was shown as an Info Request as opposed to as an Answer. You will need to rate this post if you are happy with the answer I gave.
Customer: replied 4 years ago.
Thank you. The plan has been running for 7 years but assume gain counts as this year. It is with my employer.
Expert:  TonyTax replied 4 years ago.
The gain occurs when you sell the shares. If you wish to use your wife's CGT exemption and lower CGT rate, you need to split the holding between you before you sell it.