Spouse and civil-partner share transfers for CGT

Transfers between spouses or civil partners who are living together are generally treated on a no-gain/no-loss basis. The recipient normally inherits an adjusted allowable cost; the transfer is not simply a new purchase at market value.

When the treatment can apply

The rule is tied to legal spouse or civil-partner status and the statutory living-together condition. Separation, divorce, dissolution, transfers involving a company, or transfers to another connected person can produce a different result. HMRC's current HS281 helpsheet covers spouses, civil partners, separation and divorce; use the version for the tax year concerned.

Records the recipient needs

Keep the transfer date, quantity, security identifier, the transferor’s relevant pooled cost and any transaction evidence. A later disposal by the recipient can depend on that inherited cost and on their own same-day or 30-day acquisitions.

Illustrative pooled-cost example

Suppose a transferor's Section 104 holding contains 1,000 shares with a pooled allowable cost of £6,000, and 400 shares are transferred under no-gain/no-loss treatment. Before considering any special facts, the proportionate cost associated with those 400 shares would be £2,400. That is evidence for the recipient's records, not a £2,400 market-value purchase and not a £2,400 gain for the transferor.

The example assumes one class of ordinary shares and a clean pool. Same-day transactions, restricted securities, employee shares, earlier reorganisations or jointly owned holdings may alter the analysis.

Calculator treatment

FiscalFox supports spouse-transfer records where the required cost information is supplied, but it cannot infer private facts such as marital status, living-together conditions or the transferor’s complete pool. Review the resulting pool before filing.

A practical transfer record

1. Export or reconstruct the transferor's holding immediately before the transfer.
2. Identify the exact security class and number of units legally transferred.
3. Calculate and document the relevant proportion of allowable pooled cost.
4. Record the recipient, effective transfer date and evidence of the change in ownership.
5. Add the quantity and supported cost to the recipient's records, then review any transactions in the same security around that date.

Both parties should retain the same calculation and source documents. A broker's journal entry may show quantities moving between accounts without preserving the inherited allowable cost, so the recipient may need the transferor's separate pool schedule years later.

Planning is not just arithmetic

The no-gain/no-loss rule and the recipient’s later tax position are separate questions. GOV.UK also notes that you usually do not pay CGT on assets given or sold to a spouse or civil partner, while losses on those transfers are not generally claimable. Read the current GOV.UK losses guidance and do not create a transfer solely from a calculator estimate without checking legal ownership and current conditions.

Continue with the Section 104 pool guide, and retain the transfer evidence with both parties' tax records.