capital gains

[macgee]

I was given some penny shares of value about £200 and I now want to give them to my son. They are now worth aboiut £25K but as I didnt pay for them and will give them as a gift and dont want any money for them, do I have to pay CGT. I used up my allowance last year..

[twix123]

You can give away £3000 of assets per year as a gift, and carry forward your allowance from last year if not already used free of IHT. As long as you live for 7 years after gifting assets, these will become 'Potentially Exempt Transfers', free of IHT. See the following link:

http://www.hmrc.gov.u...erty/exempt-gifts.htm

I think that you should speak to a tax advisor regarding both CGT and IHT.

[Buenchico]

As I read it, CGT DOES apply in your circumstances:
http://www.hmrc.gov.uk/cgt/

Chris

[CanisMajor]

just to clarify, twix is referring to gifts as they relate to IHT, there is in fact no tax on gifts. However as Chris says, you are liable for CGT based on current market value even if you give them away.

[macgee]

Tkanks to you all. I think I will transfer half to my wife and then give them away as I'm pretty sure theres no cgt by giving them to her and then hopefully we can use both our allowances and minise tax? How does that sound?

[1eyedjack]

Yes macgee, that works. On these figures there may be a very small residual CGT charge. You might also want to stagger the gift over a couple of years to eliminate the CGT altogether. I assume you have no unrelieved CGT losses b/fwd from previous years? If you do not currently complete SA returns you would be saving yourself quite a bit of admin hassle if you keep it within the annual CGT exemption.