CGT & Married Couples/Civil Partners

When a person gives/sells shares, investment properties etc. to a spouse, the transfer is deemed to be at a no gain/no loss value – so no CGT to pay. By transferring a half share of an investment property to your spouse prior to selling it, you can double the tax-free Capital Gain (annual exemption of £12,300 (2022/23)). Also, if you pay Higher Rate Tax (40%) and your spouse pays Income Tax at a low rate you could save some Higher Rate Income Tax by transferring shares to them.

CGT & unmarried couples

In contrast, when a person transfers shares or property to a girl/boyfriend, a Capital Gains calculation based on market value will need to be made – and CGT may be due.  And valuing unlisted shares is always fairly tricky, and carries the risk of a challenge from HMRC.

CGT & divorcing couples

Getting married is ‘a great piece of tax planning’ (re CGT and Inheritance Tax), but getting divorced brings its own tax problems.

The CGT benefits of marriage (transfers at no gain/no loss) last until the end of the tax year in which the spouses separate.  After that, CGT can apply on transfers between the divorcing/separating parties – even when no actual sale takes place.

If one leaves the matrimonial home, and there are assets to be divided, it may be better to separate shortly after the 6th April, than shortly before, giving more time to organise the various assets before the end of the tax year.

As always – seek professional advice.