PTP's Tax Tip No.8 - Husband and wife settlement and subsequent capital gain
Q: Last year I advised my client to transfer half of the shares in his trading company (then worth about 1 million pounds) to his wife so that she could be paid dividends tax efficiently. I am satisfied that s660A does not apply. But a colleague has recently suggested that the husband has made a grave mistake because if they now sell the company (which they might later this year) her taper relief will be far less than his would have been and the extra CGT will outweigh any income tax saving. Will they sue me?
A: Let's hope not.