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Is this really tax avoidance?

Husband who is a 50% tax payer owns an investment bond which he switches to his non taxpaying wife who then surrenders the bond at a gain. Clearly this transaction is done to benefit from the wife’s lower tax rates. But would HMRC really deem the husband still the beneficial owner and tax him instead?

In all my years I haven’t seen HMRC do this and this has been deemed sensible family tax planning. However, a number of third parties are now strongly suggesting this is wrong.

Many thanks  


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12th Oct 2011 09:13

evasion or avoidance?

Yes it is clearly avoidance.

But was that your actual question?

Are you actually wanting to discuss evasion?

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12th Oct 2011 09:35

OK probably not the worded brilliantly,I am just wanting to know if the above planning is no longer valid in the view of HMRC.

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12th Oct 2011 10:05

Sorry for getting on my high horse but its a very important distinction and you cant really begin to discuss tax unless you make it.

Under which item of legislation do you think this transaction might be counted as evasion?

HMRC 'view' is irrelevant.

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By pawncob
13th Oct 2011 17:34

How did he "switch" the bond? It must have been issued in his name and redeemed in his name.

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14th Oct 2011 09:03


Assigned it to his wife - so bought in his name and sold in the wife's name

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By pawncob
14th Oct 2011 10:09

Looks OK

Can't find anything which brings it into charge.

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