Transferring assets to your spouse or civil partner before selling them is one of the simplest and most effective ways to reduce your Capital Gains Tax bill. Each person has their own annual exempt amount (£3,000 in 2026/27) and their own tax rate bands — and inter-spouse transfers carry no immediate CGT charge.
How the Spouse Transfer Strategy Works
| Step | What happens |
|---|---|
| You transfer asset to spouse | No CGT on the transfer — spouse takes on your base cost |
| Spouse sells the asset | CGT calculated from your original purchase price |
| Spouse uses own exempt amount | £3,000 deducted from their gain |
| Spouse uses own rate band | Lower rate (18%) if basic rate taxpayer |
The result: the same economic gain is taxed less, or not at all, because the spouse has unused exemptions and/or a lower tax rate.
Key CGT Figures for 2026/27
| Rate / Amount | |
|---|---|
| CGT annual exempt amount (per person) | £3,000 |
| Residential property — basic rate | 18% |
| Residential property — higher/additional rate | 24% |
| Shares and non-residential assets — basic rate | 18% |
| Shares and non-residential assets — higher/additional rate | 24% |
Understanding “No Gain, No Loss”
When you transfer an asset to your spouse or civil partner while living together, HMRC treats the transfer as occurring at “no gain, no loss.” This means:
- No CGT arises on the transfer
- The recipient’s base cost is the same as yours (what you originally paid)
- When the recipient sells, CGT is based on the growth from your original purchase price
This is a deferral, not an exemption — but by routing the disposal through a spouse with lower income or unused allowances, the eventual tax charge is reduced.
Worked Example: Sharing Shares Before Sale
Michael has 10,000 shares in a company. He bought them for £2 each (£20,000 total). He plans to sell them for £8 each (£80,000). Michael is a 40% income taxpayer.
Without transfer (Michael sells alone):
- Gain: £80,000 − £20,000 = £60,000
- Less Michael’s annual exempt amount: £3,000
- Taxable gain: £57,000
- CGT at 24%: £13,680
With transfer (Michael transfers 5,000 shares to wife Helen first):
- Michael’s gain: 5,000 × (£8 − £2) = £30,000 less £3,000 = £27,000 at 24% = £6,480
- Helen (basic rate taxpayer, unused basic rate capacity):
- Gain: 5,000 × (£8 − £2) = £30,000 less £3,000 = £27,000 at 18% = £4,860
- Total CGT: £11,340 — saving £2,340 vs Michael selling alone
If Helen also had no remaining taxable income for the year, the 18% rate would apply to the full gain up to the higher rate threshold.
Transferring Residential Property
The same principle applies to property. If you jointly own a buy-to-let and plan to sell, ensuring the split is structured to make best use of each spouse’s:
- Annual exempt amount (£3,000 each)
- Basic rate band capacity
…can significantly reduce the combined CGT bill.
For a property you own solely, you can transfer a share before sale. For this to be effective:
- The transfer must be registered at Land Registry (takes several weeks)
- The transfer must be completed before contracts are exchanged on the sale — not on the day of completion
- The transfer must be genuine — HMRC scrutinises same-day or near-sale transfers
Important Limitations and Risks
| Risk | Detail |
|---|---|
| Separation or divorce | “No gain, no loss” only applies while you are living together as a couple. If you are separated, normal market value rules apply — CGT could arise on the transfer itself |
| Stamp Duty Land Tax | Transferring property with an outstanding mortgage may trigger SDLT on the debt assumed |
| The transfer must be real | Paper transfers without actual change of control can be challenged by HMRC under anti-avoidance rules |
| Pre-arranged sale | If a sale is already agreed before the transfer, HMRC may treat the transfer as ineffective |
The “Bed and Spouse” Strategy for Shares
Where a spouse has more room in their basic rate band, one approach is to transfer shares to them when you want to reset the base cost. This is sometimes called “bed and spouse” — effectively the equivalent of bed and ISA but using a spouse’s allowances. See our bed and ISA guide for the alternative approach of using the ISA wrapper.
When It Is Most Valuable
The spouse transfer strategy is most valuable when:
- You are a higher rate taxpayer and your spouse is a basic rate taxpayer
- Your spouse has unused annual exempt amount
- Your spouse has room in their basic rate band for the current year
- The asset is large enough that the rate difference (18% vs 24%) creates a meaningful saving
See our CGT annual exempt amount guide, CGT on inherited property, and bed and ISA explained.