Gifts to Spouse or Charity: Capital Gains Tax Rules

Gifts to spouse or charity can receive favourable capital gains tax treatment, but the rules depend on who receives the asset and the circumstances of the transfer. A gift can still count as a disposal for CGT purposes, so transferring property, shares or other valuable assets without understanding the tax position can create unexpected consequences.

Special rules apply when assets pass between spouses or civil partners and when assets are donated to charity. Gifts made to other people are generally treated differently.

Capital Gains Tax on Gifts to Spouse

In most cases, capital gains tax on gifts to a spouse or civil partner is not charged immediately where the couple are living together for CGT purposes.

Under the Capital Gains Tax rules for gifts to a spouse or civil partner, assets transferred between spouses or civil partners are generally treated on a no-gain/no-loss basis. This means the transfer itself does not normally create an immediate taxable gain. 

Instead, the receiving spouse effectively inherits the original acquisition cost of the asset.

For example, if one spouse bought shares for £20,000 and later transferred them to the other spouse when they were worth £35,000, the transfer would normally not create an immediate CGT charge. If the receiving spouse later sold those shares, their gain would generally be calculated using the original £20,000 acquisition cost.

This makes accurate records particularly important.

How the No Gain No Loss Spouse Rule Works

The no gain, no loss spouse rule means that the transfer is treated as taking place at a value that creates neither a taxable gain nor an allowable loss for the person transferring the asset.

However, this treatment does not necessarily remove capital gains tax permanently. Instead, the potential gain effectively carries over to the spouse or civil partner receiving the asset.

If they later sell or otherwise dispose of it, they may have to calculate CGT using the original acquisition cost.

The rules can also continue after permanent separation. Under the current CGT rules for spouses, civil partners and separation, qualifying transfers can generally receive no-gain/no-loss treatment until the earlier of:

• the end of the third tax year after the tax year in which the couple stopped living together, or
• the date of divorce, dissolution or annulment.

Transfers made under a formal divorce or separation agreement or court order can qualify for no-gain/no-loss treatment without that time limit.

These rules are particularly important where property, investments or business assets are being divided following separation.

Capital Gains Tax on Gifts to Charity

The treatment of capital gains tax on gifts to charity is generally favourable.

Individuals do not normally have to pay capital gains tax when they give an asset outright to a qualifying charity. 

This can apply to assets such as:

• land
• property
• shares
• certain investments

The rules can differ if the charity pays something for the asset.

If you sell an asset to a charity for more than you originally paid but for less than its market value, the gain is generally calculated using the amount the charity actually pays rather than the full market value.

For example, if an asset originally cost £20,000, is worth £50,000 and is sold to a charity for £25,000, the CGT calculation would generally be based on the £25,000 received rather than the £50,000 market value.

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Can You Get Other Tax Relief When Donating Assets?

Yes. Certain gifts of land, property and shares can also qualify for income tax relief as well as capital gains tax relief.

The precise treatment depends on the asset being donated and whether the charity meets the relevant conditions.

Because this overlaps with the wider rules for charitable giving, our separate guide explains how to claim tax relief on charitable donations in the UK, including Gift Aid, Payroll Giving and gifts of land, property and shares.

This keeps the focus of this article specifically on asset transfers and capital gains tax.

What Happens When You Give Assets to Someone Else?

The favourable spouse and charity rules do not automatically apply when you give an asset to a child, relative, friend or another individual.

For capital gains tax purposes, a gift to another person may be treated as though the asset had been disposed of at its market value, even where no money actually changes hands.

This can create a taxable gain if the asset has increased significantly in value since you acquired it.

In certain situations, gift hold-over relief may allow CGT to be deferred on qualifying business assets or certain shares. Instead of paying the tax immediately, the gain is effectively carried forward and may become taxable when the recipient later disposes of the asset.

Current Capital Gains Tax Rates for 2026/27

For the 2026/27 tax year, the Annual Exempt Amount for most individuals is £3,000.

From 6 April 2026, the main capital gains tax rates for individuals are:

• 18% where gains fall within the unused basic-rate band
• 24% on gains falling above the basic-rate band

The actual CGT payable depends on your taxable income, total gains, available losses and any applicable reliefs. 

These rates matter particularly where a transfer does not qualify for the special spouse or charity rules.

Why Timing Matters When Transferring Assets

Timing can significantly affect the CGT outcome.

A transfer made between spouses while the no-gain/no-loss rules apply may produce a very different result from a transfer made after those rules have ceased to apply.

Similarly, giving an asset directly to charity can have different consequences from selling it first and donating the cash.

Before making gifts to spouse or charity, it is therefore worth checking:

• who legally and beneficially owns the asset
• its original acquisition cost
• its current market value
• whether consideration is being paid
• whether the couple are living together or separated
• whether the transfer forms part of a formal separation agreement
• whether any CGT relief applies
• what may happen when the recipient later disposes of the asset

Planning before the transfer is usually much easier than correcting an unexpected tax position afterwards.

How Apex Accountants Can Help

Asset transfers can involve more than one area of tax, particularly where property, shares, business interests or separation are involved.

Apex Accountants can help you:

• Establish the original base cost of an asset
• calculate potential gains
• review capital gains tax on gifts to spouse
• Apply the no gain, no loss spouse rules correctly
• assess capital gains tax on gifts to charity
• Consider whether Gift Hold-Over Relief may apply
• review the tax consequences of separation or divorce
• Keep the records needed for a future disposal
• report taxable gains correctly to HMRC

Our capital gains tax services provide support with CGT calculations, planning, reliefs and reporting. 

Where a transfer forms part of your wider personal financial position, our personal tax services can also help you consider how CGT interacts with your other tax obligations.

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Frequently Asked Questions

Do I pay Capital Gains Tax when I give an asset to my spouse?

Usually, there is no immediate CGT charge when qualifying transfers are made between spouses or civil partners. The asset normally transfers on a no-gain/no-loss basis, meaning the recipient takes over the relevant historic cost for future CGT calculations. 

What does no gain no loss spouse mean?

The no gain no loss spouse rule means the person transferring the asset is treated as making neither a gain nor a loss. The potential gain generally carries over to the receiving spouse and may become relevant when they eventually dispose of the asset.

What happens if my spouse later sells the asset?

The spouse or civil partner receiving the asset may have to pay CGT when they later sell it. Their gain generally takes account of the amount originally paid for the asset rather than its value when it was transferred between spouses. 

Is there a capital gains tax on gifts to charity?

Generally, capital gains tax on gifts to charity is not payable when assets are given outright to a qualifying charity. Different calculations may apply if the charity purchases the asset from you.

Can I give property or shares to charity without paying CGT?

Qualifying gifts of land, property and shares to charity can normally receive CGT relief. They may also qualify for income tax relief, depending on the circumstances. 

Does CGT apply when I give an asset to my child?

Potentially, yes. The special spouse rules generally do not apply to gifts made to children or most other individuals. The disposal may instead be assessed using market value, although reliefs such as Gift Hold-Over Relief may sometimes be available.

What happens to CGT when spouses separate?

Current rules allow qualifying no-gain/no-loss transfers for a period following permanent separation. Generally, the treatment can continue until the earlier of the end of the third tax year following the tax year of separation or the legal end of the marriage or civil partnership. Certain transfers under formal agreements or court orders can qualify without this time limit.

Conclusion

The Capital Gains Tax treatment of gifts to spouse or charity can be favourable, but it is important to understand what the relief actually does.

Transfers between spouses and civil partners usually defer an immediate gain through no-gain/no-loss treatment rather than removing the underlying gain permanently. Qualifying charitable gifts, meanwhile, can receive wider CGT relief and, in some cases, additional income tax relief.

Where valuable property, shares or business assets are involved, getting advice before completing the transfer can help you understand the tax consequences, preserve the correct records and make use of any reliefs available.