Knowledge Article

Tax-free gifts & CGT

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There are three circumstances when you may not have to pay capital gains tax (CGT) on a gift. They are:

  • If the taxable value of the gift is below the CGT annual tax-free allowance of £12,300.
  • Gifts to your spouse or civil partner, or
  • Gifts to charities.

Gifts to your spouse or civil partner

You do not pay Capital Gains Tax on assets you give or sell to your husband, wife or civil partner, unless:

  • you separated and did not live together at all in the tax year you made the gift
  • you gave them goods for their business to sell on

The tax year is from 6 April to 5 April the following year.

If the spouse/partner receiving the gift later sells the asset, your spouse or civil partner may have to pay tax on any gain. The gain will be calculated on the difference in value between when you first owned the asset and the amount realised when they disposed of it.

You should keep a record of what you paid for the asset.

Gift to charities

You do not have to pay CGT on assets you give away to charity.

You may have to pay CGT if you sell an asset to charity for both:

  • more than you paid for it
  • less than market value

Work out your gain using the amount the charity actually pays you, rather than the value of the asset.

Our team of certfied chartered accountants can help you with any tax-related issues, including capital gains tax, with your business. Contact us today to find out more.

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