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CGT?? - if director gifts shares to girlfriend?

If a director gifts half his shares to his girlfriend are there CGT implications?

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I was once asked by a client about whether he should transfer half his shares in his limited company to his girlfriend... presumably he was thinking about the tax saving as his girlfriend only takes a small salary from the company (i.e. doesn't use her full personal allowance).

As they are not married, would CGT be due on the transfer of shares?

Replies (15)

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By MJShone
27th Apr 2021 13:38

Yes, in principle. You answered your own question.

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By paul.benny
27th Apr 2021 13:49

There's a bigger question as to whether it is wise to do so.

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By Paul Crowley
27th Apr 2021 13:51

It is a chargeable transfer at market value (whatever that is).

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By Tax Dragon
27th Apr 2021 14:13

As above, but don't forget ERS.

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By Dib
27th Apr 2021 14:15

I wonder if there are any CGT reliefs for gifts of business assets?

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Replying to Dib:
By Duggimon
27th Apr 2021 14:21

What do you think you would call a relief allowing you to hold over the gain on a gift?

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Replying to Duggimon:
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By Tax Dragon
27th Apr 2021 14:34

I feel like I'm in a timewarp. I swear this exact same thread has happened before.

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Replying to Tax Dragon:
Maytuna
By DJKL
27th Apr 2021 16:13

Time meant nothing, never would again
Let's do the Time Warp again!

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Replying to Tax Dragon:
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By Paul Crowley
27th Apr 2021 21:17

I thought that thread was about Deja Vu

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Replying to Paul Crowley:
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By carnmores
05th May 2021 14:35

All over again?

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By More unearned luck
27th Apr 2021 16:25

How long ago did he ask? Perhaps you should check that their are still together before you give any advice.

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By MrsNewb
27th Apr 2021 18:42

Yes they are still together.

His girlfriend did mention to me that she had been told (by their previous accountant) that she couldn't receive dividends because they aren't married. Now that I think about it, I think this is actually what she meant. Not that she couldn't have dividends, but that transferring his shares to her isn't as straightforward since they aren't married.

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Replying to MrsNewb:
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By Tax Dragon
28th Apr 2021 06:53

Then (if this is a trading company whose shares qualify for 100% relief) and they want to go through with the gift, I guess the question is... what is more straightforward,
- paying some tax
- filling in a form
- getting married/entering into civil partnership.

Options 1 and 2 are not mutually exclusive
- paying tax might require formfilling
- if the company holds investments, option 2 might not remove the tax completely, or might not be available at all.

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By MrsNewb
28th Apr 2021 08:30

What about the alternative option of issuing new shares to his girlfriend?

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Replying to MrsNewb:
Psycho
By Wilson Philips
28th Apr 2021 08:52

Issued shares are more likely to attract ERS charges. (And wouldn’t necessarily avoid the CGT issues.)

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