IT and CGT

Question 1

Explain how Nick’s UT can be used to fund both Nick and Janes ISA without incurring any CGT liability (8)

Answer 1

• using N’s CGT exemption
• ISA wraps up to £20,000
• ensuring gain does not exceed annual exemption of £11,700
• Nick transfers same amount into Janes name
• using the spousal exemption
• so she receives them at base cost
• Jane then transfers them into her ISA
• using her own CGT exemption