Transferring shares to a spouse
Selling shares is the obvious way to dispose of them — but you can also give or transfer them. Transfers between spouses or civil partners get special Capital Gains Tax treatment: no tax is due at the moment of transfer. This guide explains how that works and walks through a worked example.
The “no gain, no loss” rule
When you transfer shares to your spouse or civil partner (and you live together), the transfer is treated as happening at a price that produces neither a gain nor a loss. In plain terms: no Capital Gains Tax is charged at the transfer, whatever the shares are worth that day.
Instead, the shares move at their original base cost — what you paid for them. Your partner inherits that cost, and CGT is only worked out later, when they eventually sell. Nothing is forgiven; the tax is just deferred and passed along with the shares.
Why people do this
Each person has their own annual tax-free allowance. Moving some shares to a spouse before selling can use both partners' allowances, or shift a gain to whoever pays the lower rate. It's one of the few entirely legitimate ways for couples to reduce CGT — as long as it's a genuine, outright gift (the shares, and the proceeds when sold, must really become your partner's). The rule also needs you to be living together at some point in the tax year — it stops applying once you are permanently separated, except under the divorce rules below.
Our worked example
One partner holds 500 Shell (SHEL) shares bought at £24.00 and transfers 200 of them to the other. We'll see the transfer leave the pool with no gain. Enter it as a Transfer in the calculator and the no-gain/no-loss treatment is applied automatically. This is the exact example the button below loads.
| Date | Type | Symbol | Qty | Price | Fees | Ccy | FX Rate | GBP Value |
|---|---|---|---|---|---|---|---|---|
| 10 Jan 2025 | Buy | SHEL | 500 | £24.00 | £0.00 | GBP | 1.00 | £12,000.00 |
| 1 May 2026 | Transfer | SHEL | 200 | — | £0.00 | GBP | 1.00 | — |
Working it out, step by step
The starting holding
On 10 January 2025 our investor buys 500 SHEL at £24.00 (£12,000.00). That forms a Section 104 pool: 500 shares at a £24.00 average cost.
Section 104 pool now holds
500 shares at a £24.00 average.
Work out the base cost of the shares transferred
On 1 May 2026 they transfer 200 shares to their spouse. The shares leave the pool at their share of its cost — 200 out of 500 — at the £24.00 average.
No gain is calculated — even though the shares may be worth more
There's deliberately no “proceeds minus cost” here. The transfer is no-gain/no-loss, so the gain is £0.00 regardless of the market price on the day. The £4,800.00 isn't a gain — it's the cost that travels with the shares to the receiving partner.
The giver — what's left in their pool
200 shares (and their £4,800.00 of cost) leave the giver's pool. The remaining 300 shares stay at the same £24.00 average — a transfer never changes the average cost, only the totals shrink.
Section 104 pool now holds
The giver's pool after the transfer: 300 shares at £24.00 (£7,200.00 total cost). These continue as normal for them — ready for whenever they're eventually sold.
The receiver — what they inherit
The receiving partner now holds 200 SHEL shares with a base cost of £4,800.00 (£24.00 per share). This is the giver's original purchase cost — not the market value on the day of the transfer. The receiver should record these shares in their own records at that £24.00 cost, as if they had bought them at that price themselves.
How the receiver tracks these shares
In the calculator, the receiver would enter a buy of 200 SHEL at £24.00 on the transfer date. This starts their own Section 104 pool for SHEL at the inherited cost. When they eventually sell, their gain is calculated from that £24.00 — not from whatever the shares were worth when they received them.
The result
Transfers on divorce
The same no-gain/no-loss treatment is what makes splitting assets on divorce or separation manageable — shares can move between the couple without triggering a tax bill at the point of transfer. From 6 April 2023 the window for this was extended: transfers qualify for up to three years after the end of the tax year in which the couple stopped living together (and without a time limit where the transfer is part of a formal divorce agreement). Before that, it only covered the tax year of separation. The mechanism is identical to the worked example above — only the eligibility window differs.
What to remember
- Transfers to a spouse or civil partner are no-gain/no-loss — no CGT at the transfer.
- The shares move at your original cost; your partner inherits it and is taxed when they sell.
- It can be used to make the most of both partners' allowances and tax rates.
- On divorce, the same rule applies within an extended (post-April-2023) time window.
Related: the Section 104 pool, rates & allowances, or getting started with CGT.
Sources
The rules and figures in this guide come from HMRC and GOV.UK. This site is independent and not affiliated with HMRC.
- HMRC Capital Gains Manual CG22200 — Transfers between spouses or civil partners living together are 'no gain/no loss' (TCGA92/S58).
- GOV.UK — Capital Gains Tax: gifts to your spouse or charity — Consumer guidance on no gain/no loss transfers to a spouse or civil partner.
- HMRC Capital Gains Manual CG51575 — The Section 104 holding (pool) in detail: pooled cost and part-disposal apportionment.