How does CGT apply to gifts between spouses?
Answered 17 March 2026
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CGT on Gifts Between Spouses
What the law says
Under TCGA 1992, s.58, when individual A disposes of an asset to individual B, they are treated as if B acquired the asset for a consideration that produces neither a gain nor a loss for A — provided one of the following conditions is met:
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Living together: The disposal is made while A and B are married (or civil partners) and living together.
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Separated (post-5 April 2023): The disposal is made while A and B are still married/civil partners but have ceased to live together, on or before the earlier of:
- the last day of the third tax year after the tax year in which they ceased to live together, or
- the day a court grants an order for divorce/dissolution/judicial separation.
- Formal divorce/separation order: The disposal is in accordance with a formal agreement or court order connected with divorce proceedings (per s.225B(2)(a) or (b)).
Exceptions: The no gain/no loss rule does not apply if the asset formed part of the transferor's trading stock, or if the disposal is by way of donatio mortis causa.
HMRC guidance / practice
The no gain/no loss mechanism: Where the rule applies, the actual consideration given is ignored entirely — it does not matter whether the asset is gifted or sold between spouses. The transferee is treated as acquiring the asset at the same deemed consideration as the transferor's disposal.
Acquisition date and cost: The transferee's date of acquisition is the date of the transferor's disposal, and the acquisition cost is the deemed consideration on that disposal. If the transferor held the asset at 31 March 1982 and the transferee later disposes of it on or after 6 April 1988, the transferee is deemed to have also held the asset at 31 March 1982 for rebasing purposes.
Outright gifts vs. part-consideration transfers: If the transfer is an outright gift or for consideration less than the allowable expenditure under s.38, it is treated as producing neither a gain nor a loss. For other disposals, the market value rule is suspended and only the actual consideration is taken into account.
Separation before 6 April 2023: For disposals before that date, where spouses separated during a tax year, no gain/no loss transfers could only be made for the remainder of that tax year.
Connected persons: Even after separation, spouses remain connected persons under s.286(2) until the date of the Final Order. Where the no gain/no loss rules do not apply, the market value rule under s.17(1)(a) applies to disposals between connected parties.
Key practical point: The no gain/no loss treatment means CGT is deferred, not permanently exempt — when the transferee eventually disposes of the asset to a third party, any gain accruing since the original acquisition by the transferor will be assessed on the transferee.
Citation sources
is acquired as trading stock for the purposes of a trade carried on by the one acquiring the asset, ... or b if the disposal is by way of donatio mortis causa, ... c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . but this section shall have effect notwithstanding the provisions of section 18 or 161, or of any other provisions of this Act fixing the amount of the consideration deemed to be given on a disposal or acquisition. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part III Individuals, partnerships, trusts and collective investment schemes etc Chapter I Miscellaneous provisions Spouses and civil partners . 58 1A If an individual (“ A ”) disposes of an asset to another individual (“ B ”) in circumstances where any of subsections (1B) to (1D) applies, A and B are to be treated as if B acquired the asset from A for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to A. 1B This subsection applies where
hat year. If the couple are living together at some time in a year of assessment assets can be transferred between them at any time in that year of assessment at no gain or loss. An asset can be transferred between them at no gain or loss even when they have permanently separated provided that they have been living together at some time in that year of assessment. For disposals taking place on or after 6 April 2023 following separation of spouses or civil partners, transfers at no gain or loss
Gifts between spouses or civil partners living together or to certain bodies are treated as made on a no gain/no loss basis, see CG22200 and CG66620P. If the transfer is an outright gift or for a consideration less than the allowable expenditure within section 38, see CG15150P, it is treated as a transaction producing neither a gain nor a loss. For other disposals the market value rule is suspended and only the actual consideration is taken into account. Capital Gains Tax: what you pay it on, ra