Buying shares as a gift

Want to know how to buy shares as a gift? Here's how you can do it.

Ways to buy shares as a gift See how to gift shares
How to gift shares to spouse Learn more

You might consider buying shares as a gift for a loved one for several reasons. You might want to help them build their wealth, as in the case of children and grandchildren. Or you might want to give someone a gift of shares for their symbolic value – maybe of a company you both love, or one that has some emotional resonance with the recipient.

Since 2010, stocks have outpaced other traditional luxury presents like watches, diamonds and gold in terms of price appreciation. But the process of how to gift shares to someone else might seem tricky at first, especially when it comes to tax. Here is what you should know before gifting or transferring shares.

Can you buy shares as a gift?

Yes, this is definitely possible. There are a few ways you can go about gifting shares. But it’s not always the most convenient thing to do. Giving shares as a gift in the UK can often be more of a symbolic gesture than a practical one (from an investment perspective).

Also, due to anti-money laundering rules, you cannot gift shares as a surprise. So, whoever you’re buying shares for will need to give consent ahead of time. There is an exception to this if the recipient is a minor.

How to buy shares as a gift

Here’s a step-by-step guide explaining the basic process of buying and gifting shares:

  1. Choose the shares: Decide on the shares you wish to buy as a gift or if you want to use existing stocks and shares you own and transfer them as a gift.
  2. Check that gifting is possible: There can sometimes be restrictions around particular shares or investments that make it more difficult to gift them. It can be worth checking with the company directly through its “investor relations” page.
  3. Speak to a brokerage: Each broker may have different processes for buying shares as a gift. It’s best to contact them, let them know which shares you want to buy and ask what documents and information they need to transfer them.
  4. Select the format: Decide if you want physical share certificates to make the gift more of a unique gesture or buy shares electronically for a more practical gift of shares.
  5. Transfer shares as a gift: You’ll need to complete and sign a stock or share transfer form (Form J30), which includes the details of the person to whom you’re gifting shares. Then submit completed forms with any attached shares for gifting. Your share dealing platform should be able to walk you through this.
Best for 0% commission stocks
eToro Free Stocks logo
Finder Award
Go to site
Capital at risk. Fees apply.
Copy picks from top traders
4.3 ★★★★★
Commission-free trades
Fractional shares
Get dividend payments
Best for fractional shares
XTB logo
Go to site
Capital at risk. T&Cs apply.
Earn 5% on uninvested funds
4.4 ★★★★★
Commission-free trades
Fractional shares
5,400+ stocks/ETFs
Best for customer satisfaction
Hargreaves Lansdown Fund and Share Account logo
Finder Award
Go to site
Capital at risk. T&Cs apply.
97% would recommend
4.2 ★★★★★
Free fund trading
Expert insights
Wide range of accounts

Tax on a gift of shares

This can be a slightly complex topic because it often depends on the nature of the transfer and to whom you’re looking to gift shares. The UK has various tax rules around gifting.

You can find plenty of details online through government websites. But it might be worth seeking some professional advice from a financial adviser or tax planner who can look at your individual situation and circumstances.

Gifting shares to a spouse

If you want to transfer or gift shares to a spouse, this is definitely possible and can be a tax-efficient way to share some of your wealth. Currently, there’s no capital gains tax (CGT) to pay on shares you gift to your spouse. But they may have to pay tax at a later date if they sell the shares.

With most online brokerages, you should be able to gift your shares to a spouse electronically if they also have an account on the same platform. Another tax-efficient method is a process called “Bed and Spouse”. This involves selling your shares and then having your spouse immediately re-purchase them in their own account.

Gifting shares to a charity

Similar to gifting to a spouse, making a transfer or gift to a charity can also be advantageous from a tax planning perspective. Because there’s no capital gains tax (CGT) to pay on assets you give to charity, it can help with Inheritance Tax (IHT) estate planning.

Gifting shares to a friend

Buying shares as a gift for a friend is a little more complex. The process itself isn’t too difficult, but it can have tax implications. You have an annual gift allowance of up to £3,000, but gifts over this level can incur tax costs.

As mentioned previously, you can’t surprise friends with a gift of shares. They’ll need to know ahead of time and give their consent.

Buying shares online vs getting a paper certificate

The easiest way to buy and sell shares is using an online investment broker. Gifting shares with physical paper certificates can be a nice gesture, but it’s not necessarily the most convenient. Buying and selling paper share certificates that you physically hold yourself takes much longer and is much more expensive – and if you’re moving small holdings as a gift, the costs may outweigh the benefits of the investment.

This isn’t so bad if you are giving the shares for their symbolic or sentimental value rather than as a practical investment. Still, you can save time and expense by going online.

When you buy shares, you usually get a confirmation email that contains an image you can print out, and you can usually view images of the share certificates online as well, which you could screenshot and print.

Using an online service also lets you monitor the value of your investments more easily. One minor complication of buying and managing shares online is that the gift recipient also needs an online account.

The easiest thing for them to do would be to open an account with the same broker you use and then have you transfer the shares to their name. If they have an account with another broker, it is still possible but would take longer and could cost more.

Can you buy shares for a child?

Finder’s investment expert Zoe Stabler answers

Zoe Stabler

There are a number of ways you can buy shares for a child in the UK. Children can’t invest and control a portfolio themselves. But you can set up accounts that can be managed until they become an adult, including things like:

Another option is to buy and hold the shares yourself and then transfer them as a gift to your child once they grow up and can have their own share dealing account.

Pros and cons of buying shares as a gift

Pros

  • Gifting shares can be a unique, practical and thoughtful thing to do.
  • In some cases, it can be a tax-efficient way to transfer assets.
  • Buying shares as a gift can help get someone interested in investing.

Cons

  • There can be tax implications for you and the person you want to gift shares to.
  • The potential paperwork can take the fun out of the gift.
  • Your investment gift of shares could potentially lose some or all of its value.

Bottom line

Buying shares as a gift can be a unique gesture to make. It can also be worthwhile if you want to transfer shares to a spouse or a charity. The process can be relatively straightforward, but doing something like buying shares for a child in the UK might involve some extra steps like setting up certain accounts.

If you do decide that buying shares as a gift is what you want to do, always double-check to see how the gift of shares might impact your tax situation or that of the person receiving the shares.

In years to come, the recipient could become increasingly grateful for the present. Historically, stocks have trounced luxury gifts like diamonds, watches and gold in terms of price appreciation, offering a chance for impressive wealth growth.

Compare share-dealing platforms

Table: sorted by promoted deals first
Name Product UKFST Finder Score Min. initial deposit Price per trade Frequent trader rate Platform fees Offer Link
Trading212
4.7
★★★★★
£1
0%
£0
£0
Get free fractional shares worth up to £100 when you sign up with Finder's link. T&Cs apply. Capital at risk.
Go to site

Capital at risk

Platform details
Trading212 Invest
4.7
★★★★★
£1
£0
N/A
£0
Go to site

Capital at risk

Platform details
InvestEngine
4.4
★★★★★
£100
£0
N/A
0% - 0.25%
Get a Welcome Bonus of up to £50 when you invest at least £100 with InvestEngine. T&Cs apply.
Go to site

Capital at risk

Platform details
XTB
4.4
★★★★★
£0
£0
£0
£0
Earn up to 5% interest on uninvested cash.
Go to site

Capital at risk

Platform details
OFFER
Freetrade
4.4
★★★★★
£1
£0
N/A
£0
Get a free share worth up to £100 when you sign up and deposit at least £50. T&Cs apply. Capital at risk.
Go to site

Capital at risk

Platform details
SaxoInvestor Share Dealing Account
4.3
★★★★★
£0
£3
N/A
0.12% per year
Limited time offer: Zero commission on 100 US stocks for new customers. T&Cs apply.
Go to site

Capital at risk

Platform details
loading

All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.


Frequently asked questions

Who is most likely to be researching buying shares as a gift?

Finder data suggests that men aged 25-34 are most likely to be researching this topic.

ResponseMale (%)Female (%)
65+5.09%2.31%
55-645.86%3.40%
45-548.49%5.40%
35-4412.19%7.72%
25-3414.81%14.20%
18-2410.80%9.72%
Source: Finder sample of 648 visitors using demographics data from Google Analytics

All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.


Mark Tovey's headshot
To make sure you get accurate and helpful information, this guide has been reviewed by Mark Tovey, a member of Finder's Editorial Review Board.
Valentina Cipriani's headshot
Writer

Valentina Cipriani was a writer at Finder UK. She wrote news, features and guides about banking and credit cards, helping people to improve their financial lives. She holds an MA in International Journalism. See full bio

George Sweeney, DipFA's headshot
Deputy editor

George is a deputy editor at Finder. He has previously written for The Motley Fool UK, Nasdaq, Freetrade, Investing in the Web, MoneyMagpie, Online Mortgage Advisor, Wealth, and Compare Forex Brokers. He's focused on making personal finance and investing engaging for everyone. To do this he draws from previous work and his Level 4 Diploma for Financial Advisers (DipFA), sharing what he’s learnt. When he’s not geeking out about money, you’ll find him playing sports and staying active. See full bio

George's expertise
George has written 185 Finder guides across topics including:
  • Investing
  • Personal finance
  • Tax
  • Pensions
  • Mortgages

More guides on Finder

  • Dividend tax calculator

    Use our dividend tax calculator to work out whether you need to pay tax on your dividend payouts and how much you’re liable for.

  • Best ways to invest £20k

    Discover how you can build wealth by investing £20,000 and explore some of the top strategies for investing your money.

  • Best ways to invest £100 per month

    Find out how you can start building wealth by investing just £100 a month along with some of the best ways to invest.

  • Investing for children

    Keen to set your child off to a good financial start in life? We explain a range of different investment options.

  • How to invest with little money

    You don’t have to be rich to invest; here’s how to get started investing with little money, and investment options to consider.

  • After-hours stocks

    We explain how after-hours stock trading works, what advantages it can offer, and what the risks are.

  • Guide to shareholder voting rights

    Investing in shares gives you the right to vote in important company decisions. Here are the key things you need to know about stock voting rights.

  • Stock market trading hours around the world

    We take a look at stock market trading hours across the world and see if it’s possible to trade outside those hours.

  • Investment risk: An introduction

    See our guide explaining how risky different types of investments are.

  • Apple Stocks app: a how-to guide

    Find out what the Apple stocks app on the iPhone is, how to use it and what everything means. This guide breaks down all the complicated numbers.

Go to site