Acquisition cost for inherited item from a spouse?

Basically the current position is a husband and wife are in a 50:50 partnership.

The husband has found out he has weeks to live.  Due to this the business will eventually be sold.

 

The advice the client's are receiving from elsewhere is 

 

 

1.  For the wife to gift her share to her husband (so no CGT as husband and wife transfer so no gain/no loss).

2.  The husband will then leave the 100% of the business to the wife in his will (So no IHT on leaving to his wife).

 

3.  The wife will now have acquired at the current market value from her husband therefore there will be no CGT payable, when it is sold.

 

 

I would have assumed that in the circumstances there would have been a provision that the wife would just be treated as having acquired the business back at their initial costs, so effectively she would just get the whole gain in her hands.

 

Everything I read though, suggests that the CGT could be avoided by using the above advice. If it was this simple though, I would have thought it would have been a very widespread "trick".

 

Any help would be much appreciated. 

Comments
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Yup

Chris Wise |

 

busjmil2 |

It is widespread and it does work

MJShone |

.

blok |
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