Avoiding capital gains tax.

[BennyC]

As it stands the tax free allowance for any gain on an asset is £10,000.

If the capital of the asset was needed it makes sense to remove the years tax free allowance before the 5th of April and then again in the next tax year from the 6th of April or whenever the exact dates may be. £20,200 tax free in effect.

I was wondering if there are any problems in transferring a further sum of the asset of the full tax free allowance (£10,100) to a family member (mother, father or siblings) to have them remove/sell under their tax free allowance to then 'gift' back to you?

I know that there is a tax free allowance that you can 'gift' money which is up to £3000.

I'm also vaguely aware that there being a rule on receiving assets that providing the giver does not die within 7 years they are tax free but I cannot remember exactly.

Is anybody here familiar with this sort of thing? Or has anybody done something similar to this?

'Worst bla bla bla thread ever' before anyone else says it.

Thanks,

BennyC

 

[Kemik]

The rules for this are so complex it's unreal. HMRC have a lot of anti-avoidance legislation in place. For that reason, I suggest you contact a professional (not saying that I'm not, but I don't fancy being sued for negligence).

E.g. there are rules where if you split certain assets and sell the other half within a certain amount of time, it's treated as a whole disposal, along with rules on connected parties disposals being transferred at deemed market value, gift relief, etc.

What assets are they out of interest?

 

[Dark88]

7 yr rule is for inheritance tax.

Family members who are not spouses are connected parties. If you gift it will be treated as disposal at market value and a gain calcd on that.

Seek some advice!

 

[BennyC]

The rules for this are so complex it's unreal. HMRC have a lot of anti-avoidance legislation in place. For that reason, I suggest you contact a professional (not saying that I'm not, but I don't fancy being sued for negligence).

E.g. there are rules where if you split certain assets and sell the other half within a certain amount of time, it's treated as a whole disposal, along with rules on connected parties disposals being transferred at deemed market value, gift relief, etc.

What assets are they out of interest?

Thanks, it's a trust made up of stocks, shares, bonds and those sorts of things. It's been going for god knows how long. I've inherited it from my father who passed away a year and a half ago. It was left to him by his father and has effectively doubled since it started

7 yr rule is for inheritance tax.

Family members who are not spouses are connected parties. If you gift it will be treated as disposal at market value and a gain calcd on that.

Seek some advice!

I'll be sure to!

Whilst the tax I'll pay as it stands is only around 5% of the total, from what I've worked out on the gain minus 2 years lots of allowance. I'd like to pay as little tax where possible as I'll be using this to buy my first property so every penny helps.

 

[DM]

Get an accountant on the same page as yourself.

Capital gains is a dirty nasty no good ****ed up word to my man.

 

[Jez]

What sort of assets are these? To be totally truthful wrt to gifting, unless they are properties just get on with it. I have had money gifted to me, and back, many times. I just haven't told anybody about the transactions. I am not talking millions though.

If you are talking really serious amounts, or properties, then get a professional on the case.

 

[booyaka]

Best advise I can give is either speak to a qualified accountant/trust lawyer/IFA about the tax position. Trusts can be extremely complicated matters and without the correct advise it can cause a number of issues for all parties in the future if not done correctly. I advise a number of clients with regards trusts but without knowing the full picture I would not even begin to offer any kind of information/advice on your situation.

Also it depends on what type of trust was setup as to how the assets are treated for cgt/iht & possibly even income tax.

Are you the sole beneficiary? Who are the trustees? Have there been any tax returns for the trust completed etc etc

Basic info here but serious consider speaking to someone who is a qualified trust lawyer/accountant before doing anything.

Also speak to HMRC about it as well - they can be very useful as well

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/Trusts/TrustsandCapitalGainsTax/DG_191837

 

[BennyC]

Thanks for all the help. I don't really want to disclose too much information over the internet to total strangers. But I do thank you for letting me know it's not as simple as I first thought!