When you are thinking of potential gifts for someone, chocolates or a good book are more likely to be at the top of your list rather than shares, although the latter is possible.

Everyone has an annual gift allowance of up to £3,000, which can be carried forward only to the next financial year, allowing you to give away assets without it being added to the value of your estate for inheritance tax purposes.

If you’re keen to gift existing shares, there are several ways you can do this. For example, you can transfer shares to family members or a spouse, but they have to be members of the same investment platform such as AJ Bell Youinvest or The Share Centre in order to complete the transaction electronically.

A process called ‘Bed and Spouse’ can be a tax-efficient way of gifting. It involves you selling shares and then immediately having them rebought in your spouse’s ISA or SIPP.

In this situation the person gifting the shares wouldn’t be liable for any capital gains tax. However they would be liable if gifting shares to someone who isn’t their spouse, although individuals do have an annual capital gains allowance of £12,000 where they aren’t liable to pay tax.

One option for family members hoping to help younger members build a nest egg could be to contribute to a child’s Junior ISA. Currently up to £4,368 can be invested in a Junior ISA each year.

You can avoid paying tax if you stick to the £3,000 annual gift limit and contribute cash to the ISA, so the person in charge of the wrapper can make the investment on your behalf – or you if you are responsible for it.

However, transferring existing shares to children is classed as a disposal for capital gains tax purposes and so you would be liable for gains over and above the annual capital gains allowance.

Many investment platforms offer a ‘Bed and Junior ISA’ service which is a back-to-back transaction selling from the parent/legal guardian’s account and buying in the Junior ISA.

Other methods of giving someone an equity present is to buy a paper share certificate as a gift for someone, which can do via most of the major investment platforms.

You buy a share in certificate form and then submit a gift transfer form to a share registrar such as Equiniti. The whole process takes around two weeks and does come with an extra cost.

You find out which registrar to contact by looking to see who represents the company in which you have taken an investment. For example, if you bought shares in BP (BP.A) and want to gift the share certificate, its registrar is Link Asset Services. This information is displayed alongside contact details on BP’s website.

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