Shall I gift shares to my girlfriend?

Although the common sense ruling last week by the Lords was specific to husband and wives, I think the same logic would now apply if a male company owner gifted a share to his girlfriend., The difference is that the girlfriend is not going to be associated for tax purposes. Following the Lords' verdict, some male company owners may be tempted to gift their girlfriend a share of the company; and pay her the dividends., This appears to be fine (under current law) but the fact is that those dividends absolutely belong to her. She may chose to give them back to the company owner, but the owner has no right to them. We’ve had several cases where people have given a share to their girlfriend, or indeed their wife, and then they split up, or divorce. All of a sudden the wife or girlfriend owns half the company and there may be anything up to £300,000 in the company, and the wife/girlfriend wants her half., Company owners can’t then say to their wife/girlfriend ‘sorry I only gave you the share for tax purposes.’ So there are downsides to it (gifting a share) as well. And evidently these are more acute if the share is gifted to a non-married partner, such as a boyfriend or girlfriend. Other people say ‘I’ll give a share of the company to my mother’ but then they potentially face an inheritance tax problem., Also, it’s a fairly small saving for tax planning: by splitting shares between husband and wife the maximum saving is £6,500 a year. So this is not a huge tax saving and it can have problems attached to it. , Overall, gifting shares to the wife doesn’t really save that much tax. The average saving is £6,000 a year and there are problems with it. So the Lords’ judgement was more of a victory for the Joneses, rather than for the taxpayer at large, because they stood to lose a great deal of money. Going forward, yes it is a tax saving opportunity, but it’s not without risk.Simon Dolan, managing director of SJD Accountancy, a chartered accountant