Gift relief for business assets ― restrictions

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Gift relief for business assets ― restrictions

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
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In certain situations, gift relief is available to defer capital gains on gifts of business assets which would otherwise be immediately chargeable to capital gains tax (CGT).

This guidance covers restrictions on gift relief where a transferor gives away shares of a company holding non-business assets or where only part of an asset or holding period was used for business purposes.

For an introduction to gift relief for business assets, including the definition of business assets, and information about making claims and the possibility of paying tax in instalments, see the Gift relief for business assets guidance note.

Restriction for non-business assets in a company

Gift relief may not always completely eliminate the capital gain as sometimes gift relief is restricted. The most common example is where a transferor gives away shares in their personal company, and that company holds non-business assets.

If this is the case, the amount of the gain which qualifies for gift relief is restricted by the following fraction:

Gain eligible for gift relief = CBA/CA x gain

Where:

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