'Can I give my shares to my wife and daughter to pay less tax?'

I have some shares that I wish to sell. Could gifting some to my wife and daughter reduce the capital gains tax bill?

George from Yorkshire

'Your wife yes; your daughter no'

Mike Croxford, Which? money expert, says:

To recap for readers: capital gains tax is charged on the profit you make when selling shares, minus tax-free allowances and certain expenses related to buying and selling.

It's charged at a rate of 18% and 24%, depending on the size of the profit and the income (and other personal gains) of the person who sells the shares.

You’re correct in terms of the gift to your wife. You can transfer assets to your spouse tax-free, and then when she sells the shares, she’ll be able to use her own £3,000 tax-free allowance against any gains.

If your wife is a basic-rate or non-taxpayer, then when she comes to sell the shares she’ll likely pay the lower rate of capital gains tax (18%) on profits above her allowance, rather than the higher rate of 24%.

However, the gift to your daughter is treated as a disposal of the shares by HMRC, equivalent to selling them, and subject to capital gains tax.

• Find out more: Capital gains tax rates and allowances 

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