Family transfer and gifting of shares

A family transfer changes ownership without a sale

Transferring shares to a family member, whether through a gift or another form of transfer without a market sale, moves ownership without generating a sale price in the ordinary sense. This distinguishes it from a transaction where shares are sold to a third party for cash.

Because the new capital gains treatment targets realised gains, a transfer of this kind does not, by itself, trigger a taxable event in the same way that a sale would. This general observation should not be read as a statement about a specific family's situation, which depends on the applicable rules at the time.

The reference value travels with the shares

Even where a transfer itself is not the taxable event, the value established for the shares as of 31.12.2025 remains the relevant starting point for measuring any future gain, since only the increase in value from that date onward falls under the new treatment. This means the reference value's relevance does not disappear once the shares change hands within the family.

A family member who later sells shares they received through a gift will, in principle, still need to establish what portion of the eventual gain relates to the period before 1 January 2026 and what portion relates to the period after, using the same 31.12.2025 reference point established for the original shareholder.

Documentation should accompany the shares, not just the original owner

Since the reference value remains relevant after a family transfer, keeping a copy of the independent valuation report, along with the annual accounts and other supporting documents used to prepare it, alongside the shares themselves is a practical step. This avoids a situation years later where the recipient cannot locate or reconstruct the basis for the reference value.

Advisers involved in structuring a family transfer can note the existence and content of the reference date valuation in the relevant transfer documentation, so that the link between the original valuation and the shares received is clearly recorded.

Planning the timing of a family transfer

Families considering a transfer of shares around this period may wish to establish the 31.12.2025 reference value before proceeding, rather than after, since the report is prepared for that specific date and gathering the underlying accounts becomes progressively less current the further removed the exercise is from the reference date itself.

This is a general framework, not tailored advice

The interaction between a family transfer and the new capital gains treatment depends on the specific structure of the transfer and the applicable rules at the relevant time. Shareholders considering such a transfer are advised to review their specific circumstances with their usual advisers, using the reference date valuation as one input among others.