Tax implications of asset transfers between spouses and civil partners
Produced in partnership with Emma Haley of Boodle Hatfield LLP
Tax implications of asset transfers between spouses and civil partners

The following Private Client practice note produced in partnership with Emma Haley of Boodle Hatfield LLP provides comprehensive and up to date legal information covering:

  • Tax implications of asset transfers between spouses and civil partners
  • Inheritance tax
  • The spouse exemption
  • Anti-avoidance
  • Transferable nil rate band
  • Residence nil rate band
  • Capital gains tax
  • Income tax

STOP PRESS: The Office of Tax Simplification (OTS) published its first report on the review of capital gains tax (CGT) on 11 November 2020. This follows the second OTS report on the review of inheritance tax (IHT) published in July 2019. The reports consider the interaction of CGT and IHT. The outcome of the consultation is not yet complete and it is not known which, if any, of the proposals will be put forward in draft legislation in the future. See: OTS Capital Gains Tax Review: Simplifying by design and OTS Inheritance Tax Review: Simplifying the design of the tax.

It is natural that spouses or civil partners may want to make gifts to each other since it is fairly typical for couples to share their property. The term ‘spouses’ is used in this Practice Note to refer to both married couples and parties to a registered civil partnership, in each case of any gender.

It may be sensible to even up the couple’s assets so that they each have their own financial security and this also provides the greatest scope for tax planning. For example, if one spouse pays income tax at a higher rate than the other, it makes sense for them to allocate more of their income-producing assets to the spouse who pays income tax at lower rates.

The same principle applies for capital

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