US stock transfer

Hi, I currently live, work and pay taxes in UK. I have some personal shares in the United States in a brokerage account. I wish to transfer them to a joint account in my name and my sister’s. Am I liable to capital gain? If so, how do I calculate the gain, given there won’t be a recorded sale transaction? (it will be a transfer; no stocks will be sold) A bit of history of the account: 1. Originally my father was the sole owner on the shares (bought them in 2010) 2. In 2020 (roughly) I was added as an account holder (joint account with right of survivorship) 3. In 2022 I transferred all the shares to an account in my name only. 4. I want to know the tax implications (if any) of transferring all the shares to a joint account in mine and my sister’s name. I really appreciate your help on this.

Hi,

As you are the legal and beneficial owner of the share, you will be subject to Capital Gains Tax for the shares trasferred to your sister. You will need to obtain the market value of the share at the date of acquisition by you and the date of disposal to your sister. The difference, minus acquisition/disposal costs (such as broler fees) is deducted from the gain, to obtain the taxable figure. You can then deducted the annual exempt allowance, to work out the amount subject to tax. Shares are taxed at the lower rate of 10% and the higher rate of 20%.  

If all of the basic rate band is utilised against your UK income, the gain will be charged at the higher rate of 20%. Any of the basic rate not utilised against your income can be set against the lower rate of 10% capital gains, with the remainder taxed at 20%.

Thank you.

Thank you so much for your help. Just to clarify on the date of acquisition, would it be considered to be 50% at the time I became joint account holder with my dad and then 50% of the value at the time it all got transferred to an account in my name? Or how is it calculated? Thanks in advance.

Hi,

Yes, that is correct.

Thank you.