Uplift of value of chargeable assets on death

Capital Gains Tax transfers between spouses or civil partners continue to be treated as nil gain, nil loss transactions. This means no Capital Gains Tax (CGT) liability arises when transferring assets between a husband and wife or civil partners. This remains an effective way to manage tax liabilities while ensuring financial flexibility within a relationship.

How Does Nil Gain Nil Loss Work?

Transfers of assets between spouses or civil partners are treated as if they take place at no profit or loss for CGT purposes. This allows couples to redistribute assets for tax efficiency without triggering a taxable event. It is a key tax planning strategy for married couples and civil partners, providing flexibility in managing assets.

HMRC’s Stance Under GAAR

The General Anti-Abuse Rule (GAAR) protects against aggressive tax avoidance. However, HMRC has clarified that CGT planning involving transfers between spouses or civil partners will not be challenged if done under genuine circumstances. This includes situations where one partner has a terminal illness but retains full mental capacity. This clarification provides reassurance for couples looking to plan effectively during difficult times.

Why Is This Important?

Making use of CGT exemptions and planning opportunities can significantly reduce tax liabilities. For couples facing complex personal circumstances, such as a terminal illness, this rule allows assets to be structured efficiently without creating additional tax burdens. It also ensures that families can make financial decisions with clarity and confidence.

How We Can Help

At Lewis Brownlee, we specialise in capital gains tax planning and understand the intricacies of HMRC’s rules. Whether you need advice on transfers between spouses or managing assets during challenging times, our expert team is here to help.

Contact us today to discuss your specific needs. Visit our contact us page to connect with a tax expert and plan your finances effectively.

Make Tax-Efficient Decisions with Confidence

Capital Gains Tax transfers between spouses can provide valuable tax planning opportunities. Let Lewis Brownlee help you maximise these benefits while ensuring compliance.