Jointly held shares and BPR

Mr and Mrs M have jointly owned shares in company which qualifies for BPR for many years.

If Mrs M transfers her interest in the shares to her husband (lifetime transfer), is he deemed to be satisfying the two-year period condition immediately as he had an interest in the shares (with her) as joint owner?

Mr M has life-threatening condition and may not survive two years if shares transferred to him. Is it possible for the shares to be held as tenants-in-common so that half of the shareholding can pass to children on his death?

Samir Hussain
Gregsons Solicitors

I imagine that the idea is to obtain the CGT tax-free uplift on Mr M’s death. It seems to me that s109 IHTA will apply on his death to the shares transferred by Mrs M (see IHTM25331).

Jack Harper

I’m just thinking here. If Mrs M is due to die, then her estate would get BPR on her shares. They can pass to Mr M and he would get automatic BPR on those shares by virtue of death transfer but also would get the CGT uplift.
When he dies all the shares would be eligible if still retained.
Does that not work for you?
Lucy Orrow

I think this will help … seems sensible to me.

Note that example D19 of the GAAR endorses the CGT planning aspects of the gift between spouses. Note too that in the example the shares return to the donor spouse under the donee’s Will.

Jack Harper