Capital Gains Tax When You Give Assets Away

Introduction

When you give away assets like property, shares, or valuable possessions to family or friends, HMRC treats this as a 'disposal' for Capital Gains Tax purposes. Even though you receive no money, you're usually treated as if you sold the asset at its current market value, which means you may have to pay tax on any gain. This article explains how Capital Gains Tax works when you gift assets, including important exceptions for transfers to your spouse or charity.

What counts as giving away an asset

Giving away an asset is one type of 'disposal' for Capital Gains Tax purposes. A disposal includes:

• Selling an asset
• Giving it away as a gift or transferring it to someone else
• Swapping it for something else
• Getting compensation for it, such as an insurance payout if it's been lost or destroyed

This means that even if you don't receive any money, HMRC considers the gift a taxable event.

How you're taxed when you give assets away

When you give an asset away, HMRC treats you as if you sold it at its current market value. Market value means what the asset would reasonably fetch if you sold it on the open market at that time.

You'll need to work out your gain by calculating the difference between the market value at the time of the gift and what you originally paid for the asset. For example, if you bought shares for £10,000 and give them away when they're worth £30,000, you're treated as having made a gain of £20,000.

You'll only have to pay Capital Gains Tax if your total taxable gains for the year exceed your annual tax-free allowance (called the Annual Exempt Amount), which is £3,000 for the 2025/26 tax year.

Which assets are affected

Capital Gains Tax applies when you give away most types of valuable assets, including:

• Property that's not your main home
• Shares that are not in an ISA or PEP
• Most personal possessions worth £6,000 or more (but not your car)
• Business assets
• Cryptoassets like cryptocurrency or bitcoin

You don't pay Capital Gains Tax on gifts of certain assets, including ISAs, PEPs, UK government gilts, Premium Bonds, or betting and lottery winnings.

Gifts to your spouse or civil partner

You do not pay Capital Gains Tax on assets you give or sell to your husband, wife or civil partner. This exemption applies as long as you lived together at some point during the tax year (6 April to 5 April).

There are two exceptions where you would still pay tax:

• You separated and did not live together at all in that tax year
• You gave them goods for their business to sell on

When your spouse later sells the asset

While you don't pay tax on the initial transfer, your spouse or civil partner may have to pay Capital Gains Tax if they later sell or dispose of the asset.

Their gain will be calculated using the difference between when you first owned the asset and when they dispose of it. This means they effectively inherit your original purchase price for tax purposes.

They should keep a record of what you paid for the asset, as they'll need this information if they sell it later. If you owned the asset before April 1982, they should use the market value on 31 March 1982 instead.

Gifts to charity

You do not have to pay Capital Gains Tax on assets you give away to charity.

However, you may have to pay tax if you sell an asset to charity for more than you paid for it but less than its current market value. In this situation, you work out your gain using the amount the charity actually pays you, rather than the full market value of the asset.

Gifts to other family and friends

The normal Capital Gains Tax rules apply when you give assets to anyone else, including your children, parents, siblings, or friends. You'll be treated as if you sold the asset at market value, and you may have to pay tax on the gain if it exceeds your annual allowance.

The person receiving the gift does not pay Capital Gains Tax at the point they receive it. However, if they later sell or dispose of the asset, they'll need to calculate their gain using the market value at the time you gave it to them.

Your annual allowance

You only pay Capital Gains Tax on total gains above your tax-free allowance. For the 2025/26 tax year, the allowance is:

• £3,000 for individuals
• £1,500 for trusts

This allowance applies to your total gains for the year from all disposals, not per asset.

Reporting and paying

If your total taxable gains for the year exceed your £3,000 allowance, you'll need to report and pay Capital Gains Tax.

Even if your total gains are under the allowance, you may still need to report them in a Self Assessment tax return if you're registered for Self Assessment and the total amount you disposed of the assets for (or their market value if gifted) was more than £50,000 in the tax year.

You may be able to reduce your tax bill by deducting allowable losses from previous years or claiming reliefs, depending on the type of asset.

Keeping records

You should keep records of:

• When you acquired the asset and what you paid for it
• The market value of the asset when you gave it away
• Any costs associated with acquiring or disposing of the asset

The person receiving the gift should also keep these records, as they'll need them if they later sell the asset.

Sources

• Capital Gains Tax: what you pay it on, rates and allowances

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.