Donations to a spouse

Assume I purchased shares worth £20k a few years ago which are now worth £40k. According to https://www.gov.uk/tax-sell-shares and https://www.gov.uk/capital-gains-tax/gifts I am allowed to donate half of those to my wife before we both sell them, so that we both only have £10k gains each this tax year. This is under the £12,300 gain limit and ~£49k reporting limit - no tax is owed. How to donate: Trivial: I called my spouse over to my brokerage screen and nicely explained the donation, they excitedly agreed we should both sell our halves. I write a clear letter explaining this and upload the PDF to my next tax return for that tax year. Or - convoluted: I contact my broker and ask them about doing an actual move of the shares, they inform me I need to download a pdf, print it and fill it in in pen. I then need to *FAX* this to their (+1) US number!? ... and wait a few weeks before calling to see how it's going, they've lost it so I start again, they, like most of them are lacking in basic competence. My spouse in the meantime has struggled but eventually managed to open a brokerage account (with my help as it's complicated) sending off forms, ID etc etc and waits until they get an account number for the transfer. We wait weeks and finally the "donation" is made and we both sell. We've lost out some money with fees from both brokers which we validly discount against the gain (this can literally *decrease tax* that HMRC would get, e.g. if we over the limits and were set to pay, the banks/brokers gaining instead). The tax outcome is the same but the effort required is bonkers. Furthermore no actual evidence is technically required for HMRC to see any of this if the reporting limits are under. Please PLEASE can you confirm that a donation to one's spouse doesn't actually need to require weeks of arduous life-admin to do a "real donation" as they obviously equate to the same outcome? It would be very sensible if HMRC agreed that it's generally okay to assume that in matters of stock donations, that the higher earner effectively doubles their cap.gains limit due to being married, seeing as they could effectively donate half over each yearly gain - albeit with the effort. Some tax adviser websites even have "just assume you double your capital gains limit due to being married" or words to that effect. So I'm sure this is occurring already.

Hi,

You will need to formally notify HMRC of the transfer and receive acknowledgement so that each qulifies for their share.

Please refer to further guidance at:

HS281 Capital Gains Tax Capital civil partners and spouses (2022)

Thank you.

Does phoning the helpline and telling them, or sending an email/letter stating the gifting event count as formal notification? This is far easier than doing the laborious technique above. Probably not relevant, but these are "Unapproved employee shares" mentioned: 

Hi Damion Yates,

There is no Capital Gains Tax liability arising from the transfer of assets between a married couple and civil partners, unless they are separated and did not live together at

all in that tax year or they gave them goods for their business to sell.

 Capital Gains Tax: what you pay it on, rates and allowances





 

Yes, I understand that "there is no Capital Gains Tax liability arising from the transfer of assets between a married couple and civil partners". This is useful because somebody with over the cap.gains tax free amount, can claim to gift their wife (who they live with) half of the shares so they share the gain on the sale. The question is, can this gifting be done simply by a declaraytion given to HMRC? The reason for this query is that actually doing the share gifting can be extremely complicated by some brokerage companies.

Hi,

The helpsheet HS281 provides advice on transfers between spouses and civil partners.

HS281 Capital Gains Tax Capital civil partners and spouses (2022)

Thank you.

This document (HS281) contains "although you’re taxed separately, you may be treated as ‘connected’ with each other" and for gifts "Any amount actually paid is ignored". This would seem to imply an inherent assumption of joint capital gains on gifted shares. This is in line with everything I'd understood before. But importantly doesn't indicate evidence of this be provided. For the scenario I'm inquiring about, assets are held in my name and section 2 of HS281 adds "You’re chargeable to Capital Gains Tax if you dispose of an asset held in your name, unless you’re holding it on behalf of another person." - so if I gift half my shares to my spouse, this fits this description without my having to laboriously try and actually pass them to a separate brokerage firm. Further clarified with "If you’re holding an asset on behalf of your spouse or civil partner, your spouse or civil partner is commonly known as the beneficial owner and will pay tax if a gain is made from its disposal." The part under question is what if anything, is needed to report this? I would assume simply uploading a pdf letter explaining this for our tax returns should suffice right? There is a suggestion to use the "formal declaration about beneficial ownership using Form 17, ‘Declaration of beneficial interests in joint property and income’". However Form 17 is *only* dealing with a house and doesn't permit entering any form of formal declaration of gifting of shares.

Hi,

As you are gifting the shares to your spouse, you would need to provide details of when the gift occured. You can see more information here: 

Capital Gains Tax: what you pay it on, rates and allowances

Thank you.