CGT - Asset transfer between spouses

CGT - Asset transfer between spouses

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Can an asset be given by an individual to their spouse and sold immediately afterwards with the receiving spouse being entirely responsible for the capital gain or loss? Or should the receiving spouse hold the asset for a period of time (how long?) before disposal in order to show that the gift was genuine and not just made for tax purposes?
J Clough

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By User deleted
21st Feb 2007 19:20

Inter spouse transfer
It is possible to transfer an asset from spouse to another on the day that the asset is then sold onto another third party. The result being a nil gain nil loss on the first transaction and the receiving spouse being taxed on the final gain (taking into account they inherit the tax base cost and date of acquisition of the donor).

The above is more risky than the receiving spouse holding the asset for a while but I have never known a case where the inter spouse transaction has caused a problem.

You should consider the Taper Relief position as in some cases beneficial BATR may be lost or tainted by using the transfer.

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By AnonymousUser
21st Feb 2007 08:17

It depends is a perfectly good answer here. There is no hard and fast rule. You need to show that the second spouse had genuine ownership. The longer it is held, the easier it is to show that but genuine ownership can be there if they own it, sell it and retain the proceeds. If, however, it is given to the second spouse when there is a sale agreed would mean that the second spouse does not own the asset.

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