UK tax resident receiving gifted ETFs from non-UK parent — CGT if I sell immediately?
TL;DR: I am UK tax resident. My non-UK-resident parent gifted me ETFs with a large unrealised gain. No CGT was paid by the donor abroad, as their country does not tax this transfer. My broker now shows the donor’s original low cost basis, not the market value on the gift date. If I sell, does UK CGT use the market value at the date I received the ETFs, or the donor’s original acquisition cost?
Hi all,
I am currently UK tax resident and recently received ETFs as a gift from a parent who is not UK tax resident.
The ETFs were bought by my parent years ago at a much lower price than their current market value, so they had a large unrealised gain at the time of the gift.
The donor did not pay capital gains tax on the transfer, because under the rules of their country of residence this type of gift/transfer does not trigger CGT.
The ETFs are now in my brokerage account, but the broker shows my parent’s original acquisition cost rather than the market value at the date of the gift.
If I sell these ETFs now, for UK CGT purposes would my acquisition cost be:
the market value on the date I received the gift, or
my parent’s original acquisition cost?
Does the broker’s displayed cost basis matter, or should I calculate my UK CGT position myself using the market value at the gift date?
I would be grateful if anyone can point me to the relevant HMRC rules or share how this is normally treated.
Thanks!