Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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@Thomo1968 - make sure you understand the relevant earnings requirement for claiming tax relief on any personal pension contributions, even when you are using carry forward. You can only claim tax relief on gross contributions equal to your employment income in the tax year that you make the contribution. Many people overlook this and it can be a very costly mistake
Most interesting in bed and spouse is you can also gift shares to a partner, friend, spouse at the value you bought them at and the receiver becomes liable for the gain when they sell them... I’ll be calling my broker tomorrow to transfer just the right amount of shares to the wife for her to realise £12,300 profit when she sells them...
“ Alternatively, if there are gains in excess of the CGT allowance, some of the shares can be gifted to a spouse or civil partner under the spousal exemption to benefit from their CGT allowance. There's no disposal when the shares are gifted and the spouse acquires the asset at the original base cost.
The spouse can then sell the assets and use their CGT allowance. Again, the proceeds from sale can be used to fund their own ISA or pension if they haven’t already fully funded these in the current tax year.”
https://techzone.adviserzone.com/anon/public/personal-taxation/Practical-G-Share-match
Hi all, found another CGT solution, Bed & Spouse, may be of interest to some,
Under the ‘bed and spouse’ strategy, you can sell an asset or investment to crystallise a capital gain. Your spouse or partner can then buy it back immediately and transfers it back to you. So basically, you crystallise a capital gain while still retaining ownership of the asset or investment.
When the time comes to permanently dispose of the asset or investment, the Capital Gains Tax liability will be lower. That’s because the cost base was adjusted by selling and then immediately buying back the asset or investment.
One thing worth noting, however, is that you cannot directly sell the asset or investment to your spouse. The two transactions have to be separate.
So i sell my shares to use my CGT allowance & give the cash to the wife & she buys them back
She sells her shares to use her CGT allowance & gives the cash to me & i buy her shares back
Simples, or am i missing something ?
Thanks for replying. Appreciated.
Hi,
If it’s under the cgt allowance you will be fine.
The transfer to your sipp/isa doesn’t make a difference because even though you paid £2 odd the value at the transaction is now £3 odd. So it goes in the sales price and you get a gain.
Obviously on the sipp side you will be able to claim income tax relief etc but that is just based on your contribution so separate to cgt.
Thanks Matty - I am still a bit unclear, which I hope you can help me with. I want to sell BP shares that currently sit at an average of 226.24 that I previously purchased. The shares are currently sitting at a value of 318.10 so for each share I hold I am in profit. Once the transfer is over, I should hold approximately the same number of shares in the SIPP that I sold from the Share account at approximatley the same profit, minus the transfer costs. As I am holding onto the shares albeit in a different account, do I have to declare this as I ws of the opinion that you only have to declare CGT when you remove the money from your dealing accounts into a bank account to use. I am intending moving the shares over so only making a paper profit in my share dealing account. Would the CGT allowance not help me here. It is my intention to move over other funds in the new tax year to my ISA and my wife's ISA. I am a bit heavy in my share account. It is my long term aim to remove funds on a yearly basis from my share dealing account within the CGT allowance to give myself a yearly income for my pension over the course of my retirement. Thanks in advance.
Hi
Anything you have in a tax wrapper of pension or isa you can put to one side almost like they are owned by another person.
If you transfer shares to your sipp from your dealing it’s just like bed and isa. The gain will be in your dealing account and for you to report on your personal tax return (if required)
If you do not buy the shares again in your dealing account you will crystallise the gain.
Basically the transfer event is just treated as a normal sale to the market.
I have shares in ISA, SIPP and Share account. I should have carried out this process when I recieved my lump sum in August but didn't. I was reading up on the Allowance that can be carried forward in relation to pension allowances. For those investors not aware, you can carry forward your annual pension allowance. There is a load of information in relation to this on the Hargreaves Lansdown website. I have worked out that I can carry over funds from my share account into my SIPP. Frustrating thing is that I will haveto incurr the selling fees and stamp duty. I was going to arrange this next week so that I can acarry forward unused allowances from the current tax year and previous tax years.
I cannot find anything about the 30 day rulefor buying and selling the same share. I am going to sell my BP and RDSB shares, transfer over the money and re-buy them. Hopefully I can sell at a higher rate than I am buying and this will cover the costs.
Does the 30 day rule count for transferring between a share account to a SIPP account. I am aware that it does not count when transferring into an ISa and was just wanting to confirm the same for transferring between the SIPP and share account as I have made a profit on my original investment.