CGT—hold-over relief for trusts and individuals
CGT—hold-over relief for trusts and individuals

The following Private Client guidance note provides comprehensive and up to date legal information covering:

  • CGT—hold-over relief for trusts and individuals
  • Business hold-over relief under TCGA 1992, s 165
  • Hold-over relief under TCGA 1992, s 260
  • Rules relevant to both types of hold-over relief
  • Gifts to settlor-interested trusts
  • Making and withdrawing a claim

FORTHCOMING CHANGE: As originally announced at Autumn Budget 2017 and followed up by written statement after Spring Statement 2018, plus an announcement in Budget 2018, the government ran a consultation on the taxation of trusts from 7 November 2018 to 28 February 2019, inviting views on the principles of transparency, fairness and simplicity that it believes should underpin the taxation of trusts. See also the research exploring the use of trusts which was also published on 7 November 2018. See News Analysis: Exploring the consultation and review on the taxation of trusts.

Where an asset is acquired or disposed of otherwise than at arm’s length (ie there is a gift or a transfer at an undervalue), this is a disposal for capital gains tax (CGT) purposes. The chargeable gain on this disposal is calculated on the basis that the deemed consideration is the market value of the asset (whether or not the transferor and transferee are connected). A CGT charge may therefore arise even though there is no cash or actual consideration to pay the CGT. In these circumstances, hold-over relief may be particularly useful.

Hold-over relief allows a chargeable gain arising on certain types of disposal to be deferred. Where the relief is claimed, no CGT is due in respect of the chargeable gain arising on the disposal. Instead, the base