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TaxRobin, Tax Consultant
Category: Tax
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Experience:  International tax
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I have been asked to consider a gift by transfer from my son

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I have been asked to consider a gift by transfer from my son to me(basic rate tax payer) of some FTSE 100 shares with no exchange of cash albeit I would gain a benifit upon disposal. Is CGT payable by me assuming the market value exceeds my annual CGT allowance? If so is it payable upon receip of the gift @market value or at the time of future disposal with an acquisition price of nil?
Hello and thank you for allowing me to assist you.
You would not have a CGT responsibility when you receive the shares but may when you sell. You will be taxed on dividends paid to you when the transfer is complete.
When your son gifts the shares to you he will need to get a valuation of the asset at the time. This will be market value. He can defer his gain and then you will pay CGT on the difference in his cost and the actual sale price you receive.
Because they are a gift made after 31 March 1982 - you use their market value when they were given to you, unless he claims for Gift Hold-Over Relief.
Customer: replied 3 years ago.

To be clear-are you saying there is no CGT payable at the time of the gift?

That CGT is only payable at the time of disposal by me and is calculated on the basis of Disposal price less market value at time of gift.

There is no CGT for you when you receive.
When you dispose of the shares you will either use the Market Value on the date you received or you will use your son's cost. This depends on what he does at the time of the gift.
If he claims hold over relief then you (when you sell) will use his cost as your starting point for CGT calculations.
If he does not then you will use the market value on the date you receive the gift.
If your son reports and pays his tax you will use market value when you sell.
If he reports and claims hold over relief, you will pay CGT on the difference in his cost and your sell price.
Hello Richard
My goal is to give you excellent service. I hope that information is just what you needed. It’s pretty complicated.
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Customer: replied 3 years ago.

Did you receive my final question which was-

Will my son have a CGT liability? I have assumed not -on the basis he would not receive any monetary benefit.

He would need to report and use the market value on the day of the gift to see if he has a gain or loss. He can use the Hold Over Relief and not pay CGT at the time of the gift if he does have a gain. That way he can postpone all or part of his gain until the asset is sold or disposed of by you. He would have no tax to pay on the disposal at that time of the gift.

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