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inter spouse transfer at no gain no loss

inter spouse transfer at no gain no loss

Client is additional rate taxpayer and transferred various shares to wife (who is a basic rate taxpayer) over the years. Shares are now showing a considerable paper loss and client would like to offset the losses against potential gain on jointly owned property which is being disposed of.

Can client's wife transfer the same shares back to her husband at the original cost to him so that he can sell them and utilise the losses against the gain on sale of the jointly owned property?


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23rd Apr 2012 17:13

Simple Answer is

"yes"  Although in some quarters the modern day thinking on this would be that it is tax avoidance.

When I first started out in tax...not much more than 2 or 3 years ago ;) this would have been covered by Lord Tomlin's comments in the Duke of Westminster case from 1936

"every man is entitled to order his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be"  

70odd years on it is becoming politically incorrect to make most efficient use of the exemptions and reliefs available...

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24th Apr 2012 11:35

Unlikely to be a problem

It is very unusual for HMRC to challenge inter-spouse transfers. There would be some risk if one spouse transferred an asset to the other, it was sold and the sale proceeds passed straight back to the first spouse. Many years ago HMRC said, following the Ramsay case, that they would not seek to challenge straightforward inter-spouse transfers.

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