Gifting Shares - NOT to Spouse

[TheCyclingProgrammer]

Regardless of the settlements legislation, if there is an artificial method which serves no commercial purpose other than to avoid tax, then you will be taxed on the transaction as a whole.

Sorry I don't agree.

In that case you are on equally shaky ground if you're giving shares to your spouse in order to save tax. Yet it seems to be mostly accepted that it's fine, certainly post-Arctic.

If HMRC could simply take the above view then why have the settlements legislation in the first place?

I'm not saying that giving shares to your parents wouldn't attract unwanted attention. I do think it is more likely to catch HMRC's eye than an unmarried partner or a spouse, but as I said before, strictly speaking they all carry the same risk of being caught if you were investigated.

(Yes, I do agree with the general sentiment that HMRCs loss in the Arctic case and failed attempts to change the law mean they probably aren't that interested in chasing spouses over this)

[DirtyDog]

Sorry I don't agree.

In that case you are on equally shaky ground if you're giving shares to your spouse in order to save tax. Yet it seems to be mostly accepted that it's fine, certainly post-Arctic.

If HMRC could simply take the above view then why have the settlements legislation in the first place?

I'm not saying that giving shares to your parents wouldn't attract unwanted attention. I do think it is more likely to catch HMRC's eye than an unmarried partner or a spouse, but as I said before, strictly speaking they all carry the same risk of being caught if you were investigated.

(Yes, I do agree with the general sentiment that HMRCs loss in the Arctic case and failed attempts to change the law mean they probably aren't that interested in chasing spouses over this)

So, what overturned Ramsay?

[northernladuk]

Sorry I don't agree.

In that case you are on equally shaky ground if you're giving shares to your spouse in order to save tax. Yet it seems to be mostly accepted that it's fine, certainly post-Arctic.

If HMRC could simply take the above view then why have the settlements legislation in the first place?

I'm not saying that giving shares to your parents wouldn't attract unwanted attention. I do think it is more likely to catch HMRC's eye than an unmarried partner or a spouse, but as I said before, strictly speaking they all carry the same risk of being caught if you were investigated.

(Yes, I do agree with the general sentiment that HMRCs loss in the Arctic case and failed attempts to change the law mean they probably aren't that interested in chasing spouses over this)

But where do they draw the line... and there has to be a line. Spouse/unmarried, ok. Parents.. Hmmm. Friends/strangers... getting silly. As many taxes favour married couples it would make sense for the line to end here. Anything past that is at risk surely.

[malvolio]

The line is drawn at "Connected Persons" which are defined as immediate family members by birth or marriage. There is a specific exemption for spouses, as per Arctic. It does not apply to non-connected persons, so your unmarried partner is out of scope assuming you are avoiding the biblical definitions of incest.

So fascinating as this all is, the bottom line is that the OP is liable for paying the taxes on his mother's share income.

[TheCyclingProgrammer]

The line is drawn at "Connected Persons" which are defined as immediate family members by birth or marriage.

Can I ask what you are basing this on? Where in the settlements legislation or indeed any HMRC guidelines does it mention anything about "connected persons"? Only children are specifically covered by the legislation.

As mentioned before, spouses aren't exempt from the settlements legislation in all circumstances.

Conversely, it is possible for the settlements legislation to apply to anybody, in certain circumstances where the settlor retains an interest. To say that "unconnected persons" are outside the scope if the legislation is wrong.