Why stock transfers occur

Over the course of a tax year, there will be many requests to stock transfer assets from one Investment Account to another one on our platform. Stock transfers can be made for many reasons, most commonly for:

• Moving assets between spouses or civil partners. Transfers of assets between spouses/civil partners are normally treated as no gain/no loss for capital gains tax if they are living together in the tax year.
• Changing the ownership of accounts between joint and sole names.
• Setting up designations for children.
• Moving money between accounts of an individual, to invest in different strategies.

New online transfer facility

To make things quicker and more straightforward for advisers and their clients, this process can now be conducted online. This includes transfers to a client's existing or new Investment Account – or to another person's existing Investment Account – for the following transactions: 

• A transfer to a client’s spouse or civil partner. 
• A transfer between two accounts held in the same client’s name. 
• A gift to another person for which no payment will be made .Gifts are a disposal subject to capital gains tax, where market value is substituted for the (usually nil) proceeds. 

This can be done fully or partially, by amounts, units, or percentage, and through any combination of funds or cash.

Setting up a new Investment Account

If the transfer is being made to another person, the Investment Account receiving the transfer must already be set up. However, it’s very quick and easy to set up a new Investment Account by submitting a lump sum contribution for a nominal sum. This will instantly open the Investment Account, regardless of whether a payment is made.

Bed and ISA process made easier

This online facility can be particularly useful in the run up to tax year end where a client wishes to gift money from an Investment Account held in their sole name to a spouse or civil partner, to utilise Bed & ISA process. Previously, this required a paper application, but the new online process avoids the need to obtain client signatures. All other Bed & ISA applications can already be completed online, including where money is moved from jointly-held accounts into an ISA for each individual.

Capital gains tax management

Of course, consideration should always be given to the capital gains tax position when conducting stock transfers. Our capital gains reporting facility can help to identify if any action needs to be taken. If you do opt to use this tool, you will need to confirm the acquisition costs for the funds and/or Exchange Traded Instruments that are being transferred via the ‘update acquisition cost’ functionality online.

When using the capital gains reporting facility, our calculator always assumes that the transfer out from the account will not be treated as a disposal for the purposes of capital gains. If the transfer should be treated for capital gains as a transfer at market value, then, to calculate capital gains accurately going forward, you may wish to create a disposal by selling the assets to cash prior to the stock transfer, then using this cash to purchase the investments in the new account. Please note your client will be out of the market while the sell and subsequent buy is executed, and trading charges or bid-offer spreads may be applicable.

Further guidance

For more guidance on our online stock transfer process, please visit our Help & Support hub.