Not Really sure where to post this, but have a few questions surrounding the transfer of shares from parent to child
My understanding of share transfers are that if a parent transfers shares to a child, the child pays 1% stamp duty of the value of the shares at date of transfer, and the parent pays CGT of 33% on any gain they have made. In turn the child only pays CGT if the shares rise in value when they try to sell?
My questions are as follows - if the parent is transferring over shares where they will have made a capital loss from date of purchase to date of transfer - is it correct in saying they are not liable for any CGT, and the only cost is the child pays the 1% stamp duty.
Are there any other conditions that need to be applied for the above, or does it have any future implications - does the child need to hold the shares for any length of time?
What is stopping a wealthy parent from purchasing shares today for example, 500k in share x and transferring them to a child next week, child pays 1% i.e €5k, and they parent pays little/no tax given there is no gain on the investment. The child can then sell the shares, and in theory be €495k richer, as oppose to the parent gifting the 500k and having to pay tax on it.
I assume there is something against this loophole but I'm struggling to see what it is? Can anyone shed light on it?
My understanding of share transfers are that if a parent transfers shares to a child, the child pays 1% stamp duty of the value of the shares at date of transfer, and the parent pays CGT of 33% on any gain they have made. In turn the child only pays CGT if the shares rise in value when they try to sell?
My questions are as follows - if the parent is transferring over shares where they will have made a capital loss from date of purchase to date of transfer - is it correct in saying they are not liable for any CGT, and the only cost is the child pays the 1% stamp duty.
Are there any other conditions that need to be applied for the above, or does it have any future implications - does the child need to hold the shares for any length of time?
What is stopping a wealthy parent from purchasing shares today for example, 500k in share x and transferring them to a child next week, child pays 1% i.e €5k, and they parent pays little/no tax given there is no gain on the investment. The child can then sell the shares, and in theory be €495k richer, as oppose to the parent gifting the 500k and having to pay tax on it.
I assume there is something against this loophole but I'm struggling to see what it is? Can anyone shed light on it?