Passing the business to your children
Giving shares away counts as selling them at what they're worth, but for a trading company you can usually put the tax off until they sell. A gift to your husband or wife has no tax now. We show the tax now and later, inheritance tax if you died within 7 years, and any stamp duty.
Your answer
Say who you're giving the shares to and answer the questions about the shares to see the tax now and later.
About this calculator
For company owners who want to give shares to a child, a husband or wife, or anyone else, or sell them for less than they're worth. It shows the tax now, the tax that's only put off, inheritance tax if you died within 7 years, and stamp duty.
You type in what the shares are worth and what they cost: we don't read your company's records. A private company's shares need a valuation, so the answer is our best estimate. It's for people in England, Wales and Northern Ireland; if you pay income tax in Scotland, talk to us.
Gifts into a trust or to a company, shares on a stock market or AIM, and companies that hold a lot of investments are handed to a person: we work those out with you. We don't cover new share classes, family investment companies or wills.
What happens to your answers
We don’t keep them. Your answers go to our server to do the sums and aren’t stored or logged. If you copy a link to your answers, they’re in the link itself, so only share it with people you trust.
How it’s worked out
A gift counts as selling the shares at what they're worth. For a trading company, you and the person you give them to can claim to put the tax off (gift hold-over relief): they take over your cost and pay the tax when they sell. Money they pay you above your cost is taxed now, and stamp duty of 0.5% applies to it.
A gift to your husband, wife or civil partner while you live together has no tax now: they take over your cost. There's no inheritance tax on it either.
Inheritance tax: a gift to a person is free if you live 7 more years. If you die sooner, business relief covers it (in full up to £2.5 million, half above), but only if they still own the shares then. In the example, 40 of 100 shares worth £30,000 each is £1.2 million: with the claim you pay nothing now instead of £227,184, and your child takes over your £400 cost.
Worked example
Giving 40 shares to your child would cost £0 in tax now if you claim to put the tax off, instead of £227,184.
2026/27 rates · a gift, nothing paid · you claim to put the tax off · business relief if they keep the shares · this year's gift allowance unused · England, Wales and Northern Ireland
| What the 40 shares you give are worth (a gift counts as a sale at this) | £1,200,000 |
|---|---|
| Less what they cost you | £400 |
| Profit on the gift | £1,199,600 |
| Profit you can put off until they sell (gift hold-over relief) | £1,199,600 |
| Tax-free yearly allowance on profits | £3,000 |
| Tax without the claim (lower rate for selling a business on the first part) | £227,184 |
| Tax to pay now | £0 |
| Their cost for the shares (what they're worth, less the profit put off) | £400 |
| Value you give away (worth less money paid) | £1,200,000 |
| Business relief, if they still own the shares when you die (100% to the allowance left, then half) | £1,200,000 |
| Yearly gift allowance used | £3,000 |
| Tax-free amount left after other gifts in the last 7 years | £325,000 |
| Inheritance tax if you died in the first 3 years (40%): they still own the shares / they had sold | £0 / £348,800 |
| Inheritance tax if you died 3 to 4 years after (32%): they still own the shares / they had sold | £0 / £279,040 |
| Inheritance tax if you died 4 to 5 years after (24%): they still own the shares / they had sold | £0 / £209,280 |
| Inheritance tax if you died 5 to 6 years after (16%): they still own the shares / they had sold | £0 / £139,520 |
| Inheritance tax if you died 6 to 7 years after (8%): they still own the shares / they had sold | £0 / £69,760 |
| Stamp duty (nothing is paid for the shares) | £0 |
Worked out using gift hold-over relief (Taxation of Chargeable Gains Act 1992, section 165), HMRC's Capital Gains Tax and inheritance tax rates for 2026/27, business relief and the gift rules, and stamp duty on shares. Not legal or tax advice.
Questions people ask
Does my child pay the tax later instead of me?
Yes, if you put the tax off. They take over your cost, so when they sell, their profit includes the part you put off. It's delayed, not cancelled, and they may not get the lower rate for selling a business. If they still own the shares when they die, that profit isn't taxed as a gain.
What happens if I die within 7 years of the gift?
Business relief usually still covers the gift, as long as they still own the shares and the company still trades. If they've sold, the gift is added back and inheritance tax may be due, with less tax if you lived 3 to 7 years. We show each case.
Will I still have an income?
Dividends go to whoever owns the shares. Give away 40% and 40% of the dividends go with them, and for a child under 18 the tax on them over £100 a year stays with you. A salary, or shares that keep their dividends, can keep an income: talk to us before the gift.
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