Fair shares

By THIS IS MONEY
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How do you transfer shares as a gift and what are the taxation limits involved? AM, Exeter.

Maurice Fitzpatrick at accounting form Chantrey Vellacott DFK says: You get a normal stock transfer form from a company registrar, stockbroker or legal stationer, fill it in and send it to the registrar of the company whose shares are involved, but as the shares are a gift you need only pay a 50p flat rate stamp on it, as opposed to the usual stamp duty.

Two different taxes may be involved. Whoever receives the shares is deemed to have received the market value of the shares for capital gains tax purposes, even if he or she did not pay for them. Everyone has a capital gains tax exemption of £7,100 this tax year but working out if the gift means that has been exceeded and how much tax is due is very complicated - consult an accountant.

The giver may be affected by inheritance tax. If he or she dies within seven years of the gift being given it could be included in their estate for inheritance tax purposes, though if the value falls within the annual IHT exemption limit (£3,000 this tax year) it will be free of tax, as it will be if the giver lives for seven years afterwards.

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