If you can transfer half the shares into your wife's name before you sell them then you'll get two CGT allowances and she'll pay CGT at 18% of the gain and you'll pay 28%. Or if you can wait until April and transfer half to your wife and then sell half just before the end of the tax year and half in the new tax year which will mean no CGT to pay at all. Depends on when you need the cash from the sale. If you need the cash now then the cheapest way is to leave you with a gain that is matched by your allowance and transfer the rest to your wife to sell as she will only pay CGT at 18%.

The suggestion re EIS would also proably work but you need to take proper advice as it is riskier than simply staging the sales to avoid CGT and it sounds like you'll need to tie the money up for 3 years. There will be lots of other options available if you are prepared to be creative and allow a certain amount of risk - speak to an accountant who specialises in capital taxes for advice if you want to go down these routes.

Hi Neil,

Investing in an ISA won't mitigate an already existing Capital Gains Tax (CGT) liability. It will mean that you won't accrue any new CGT once the money is in an ISA.

You could look at an EIS (Enterprise Initiative Scheme). This won't reomve the CGT liability immediately bu tit will defer it. Furthermore, you will get 30% income tax relief, which will be helpful as you have stated you are a higher rate taxpayer.

You will need to speak to a financial adviser as this area is slightly complicated. You will need to keep the EIS for at least 3 years in order to get the CGT deferral. You can then take the cash out from the EIS, retain the £10,000 (ish) Capital Gains Tax Allowance and re-invest the balance into a new EIS and get another slug of 30% tax relief.

Check out companies such as Octopus or Stellar Asset Managment and have a look at their information to help decide whether this may be of interest to you.

Hope this helps.

Hello,

I'm getting some shares soon which will have a capital gain of £27,000. I'm a high rate earner and my wife doesn't work (yes, that means I'm screwed for family allowance ;) )

Assuming I can transfer £10,000 to her, that leaves about £7000 (I have made no other gains).

What are the options to avoid paying tax on this amount? I believe I can invest in ISA or a share based ISA (I already have ISA to the max so that just leaves share isa). What are the rules on this (i.e. how long before I can withdraw it, etc) or are there any other ways?

Thanks.