Shares/ CGT

Shares/ CGT

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My client has £50k of shares and is a higher rate tax payer. She pays additional tax on her dividends

Her husband is a BR tax payer

Is there anything to prevent her transferring her shares to her husband to reduce the tax on dividends? 

Is it worthwhile  keeping 50% each to keep the CGT annual allowance?

Thxs

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Nichola Ross Martin
By Nichola Ross Martin
26th Mar 2012 10:41

No

provided that she makes an outright gift and the shares are ordinary shares (full voting rights and rights to capital on winding up).

Good practice to ensure that he pays his dividends into his own bank account - as the rules say that if a gift is not outright, the income arising on the shares will be taxed as her income, under the Settlement provisions.

Virtual tax partner support for accountants and their clients: www.rossmartin.co.uk

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