Gifts to a spouse or civil partner

Transfers of assets between spouses or civil partners are usually free from Capital Gains Tax (CGT). When you give or sell an asset to your spouse or civil partner, it is treated as a disposal for CGT purposes, but on a ‘no gain, no loss’ basis.

This means no immediate tax is due, and the receiving spouse effectively takes over the original cost and ownership history of the asset. When the asset is ultimately sold, any gain is calculated based on the difference between the original purchase cost and the eventual sale proceeds, not the value at the date of transfer. Records of the original cost should therefore be retained.

There are some important exceptions. The no gain/no loss treatment does not apply if you were separated and did not live together at any point during the tax year of the transfer. It also does not apply where assets are transferred as trading stock for the recipient’s business to sell on. In these cases, the transfer is treated as taking place at market value, and a CGT liability may arise for the person making the transfer.

Similar rules apply to gifts to charity. Generally, no CGT is due on outright gifts. However, if an asset is sold to a charity for more than its original cost but less than market value, a gain may arise based on the actual sale proceeds.

If you need tax advice, give our expert and friendly team a call on 01380 723692 or email us here.