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Gift relief and spousal transfer

Does a chargeable gain that has been held over fall due on a subsequent transfer to a spouse?

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My question relates to the interaction between gift relief and transfers to spouses.

Mr A was the sole beneficiary of an old fashioned "accumulation and maintenance" trust that owned a residential property. On his 18th birthday, he became absolutely entitled to the assets and income of the trust.  The trustees and Mr A held over the chargeable gain from the date of the creation of the trust until the 18th birthday by filing the relevant form with HMRC.

Mr A subsequently becomes a higher rate income tax payer, while his wife is only a basic rate income tax payer. He therefore decides to transfer the property to her so that she will pay a lower rate of income tax on the rental income.

I understand that in accordance with s. 58 TCGA, disposals between spouses are deemed to occur on a "no gain no loss" basis, so that no CGT falls due.  However, on this occasion, will the "disposal" mean that the chargeable gain held over by the trustees and Mr A (i.e. the gain that accrued between the creation of the trust and the 18th birthday) will now fall due?

Also, presumably any chargeable gain accrued since the 18th birthday is still subject to s. 58 and therefore no CGT need be paid on it?

Many thanks.




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