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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15917
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I work for an American company floated on the Dow Jones. I

Customer Question

I work for an American company floated on the Dow Jones. I receive stock options every year. I am able to transfer some if these shares, once purchased at the option price, to my wife.
My question is this: is she liable to Capital gains tax on any profit made after selling them, or am I liable for anything over my personal threshold as they were originally mine?
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.
Hi.

If assets are transferred between husband and wife who are living together or the parties to a civil partnership who are living together, the recipient (of shares in this case) takes the cost of the asset to the donor as their own. In effect, the transfer is done on a no gain/ no loss basis so no gain or loss will arise until the shares are sold by the new owner.

The cost of the shares will normally be the price paid for them in the case of an HMRC approved share option scheme or the sum of the price paid for the shares and the amount on which income tax and national insurance contributions are paid in the case of a an unapproved share option scheme which most US schemes are as far as HMRC are concerned.

I hope this helps but let me know if you have any further questions.
Customer: replied 3 years ago.
Thanks, XXXXX XXXXX I've got it.....so, I exercise stock options and sell the resultant shares gaining a profit of up to £10,900 and pay no Capital Gains Tax. I exercise a similar amount of options, transfer the shares to my wife and she sells them, gaining a profit of up to £10,900 and she pays no Capital Gains tax either.....correct?
Expert:  TonyTax replied 3 years ago.

That's correct. There is no gain or loss on the transfer of shares to your wife.

TonyTax and other Tax Specialists are ready to help you
Customer: replied 3 years ago.

Excellent info - thanks Tony

Expert:  TonyTax replied 3 years ago.
Thanks for accepting my answer.

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