Alan Pink considers tax some opportunities and pitfalls involving gifts of shares to family members.
It’s a well-established principle of UK tax law that individuals are taxed, not households. Unlike the position as I believe it to be in some other tax jurisdictions, this means that a household with one high earner could be bearing a much heavier tax burden than a household with two or more earners whose total income adds up to the same figure. Inevitably, therefore, some tax planning efforts in the UK are aimed at spreading the income amongst family members. Every adult or child in this country is entitled to a personal allowance each year, and each has their own separate and individual set of income tax bands.
Barriers to income ‘spreading’
The basic tax planning principle is very simple. Someone who may be paying income tax at a higher rate (say 40% or 45%) can make a very significant saving in their
