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Basil and Yoko are a married couple reviewing their tax position for the tax year 2024-25.
The following income applies to the tax year 2024-25:
– Basil will receive a gross annual salary of £100,000. He has unused capital losses brought forward from earlier years of £30,000.
– Yoko will receive property income of £19,000. She is also planning to sell some quoted shares which will create a chargeable gain of £30,000. (This gain will not be eligible for business asset disposal relief and will arise in the tax year 2024-25).
– Basil and Yoko have savings deposits in their joint names which will generate taxable interest of £8,000 for the year. They have always treated this income as being split 50:50 between them.Calculate the overall tax saving that can be made by the couple if the quoted shares are transferred to Basil before disposal and the savings deposits are arranged so that Yoko receives all of the interest income.
here when i solved the qtn, as a transfer between spouses gives no gain no loss, i ignored the transaction of yoko transferring to basil, like if there is no gain no loss how will the cap loss of basil be set off ? but in solution they said that the 30000 gain is set off with 30000 loss.
can u once clarify how is the transfer of asset from yoko to basil before disposal treated nd its effect on cap loss of basil?
The point is that Yoko hasn’t sold the asset yet, so the gain is unrealised.
She transfers the asset to Basil at NGNL which means that Basil takes over Yoko’s allowable costs.
Basil then sells the asset which results in a gain of £30,000 against which the capital loss brought forward can be offset.
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