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HMRC internal manual

Capital Gains Manual

Transfer of assets between husband and wife: further points

Each individual is entitled to the annual exemption from Capital Gains Tax explained at CG18000+.

For years up to and including 1989-90 a husband and wife could have only one annual exempt amount between them. For 1990-91 onwards they become entitled to their own annual exempt amount and for 1990-91 and subsequent years a capital loss accruing to one spouse is only available to be set off against gains accruing to the same spouse. The rules which applied before the introduction of independent taxation from 6 April 1990 are explained more fully at CG22100+ below.

Before the introduction of independent taxation it was possible for the losses of one spouse to be set off against the gains of the other. This is explained at CG22100 below.

You may come across losses which accrued before 1990-91 but which have not been available for set off against a capital gain until that year or later. Such losses may only be set off against the gains of the person who disposed of the asset which gave rise to the original loss. Even though a set off of that loss against gains of the other spouse would have been available if there had been such gains in the years up to 1989-90 a set off will not be available against gains of later years.

For disposals on or after 30 November 1993, the extent to which indexation allowance can create or increase a loss is subject to restrictions, see CG17700+. Special rules apply where there has been a transfer at no gain/no loss between a husband and wife or between civil partners, see CG17730+.

NOTE. If a taxpayer is within the charge to Capital Gains Tax, neither indexation allowance nor taper relief apply to disposals of assets on or after 6 April 2008. Previously indexation allowance had been frozen at April 1998. For indexation allowance see CG17207+ and for taper relief see CG17895.