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
imgtext

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:

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+

Popular Articles

Special rate pool and long life assets

Special rate pool and long life assetsSpecial rate poolExpenditure on some types of plant or machinery must, if neither annual investment allowance (AIA) nor first year allowances (FYAs) are available, be allocated to a ‘special rate pool’. Expenditure to be allocated to the special rate pool

14 Jul 2020 13:41 | Produced by Tolley Read more Read more

Gifts with reservation ― overview

Gifts with reservation ― overviewIntroductionA gift with reservation (GWR) arises when an individual ostensibly makes a gift of his property to another person but retains for himself some or all of the benefit of owning the property. The legislation defines a gift with reservation with reference to

14 Jul 2020 11:48 | Produced by Tolley Read more Read more

Corrections and amendments to the IHT account

Corrections and amendments to the IHT accountThis guidance note explains how to deal with changes to the taxable values in the original inheritance tax account.Why do amendments arise?When the IHT account is first submitted to HMRC, it is based on information available at an early stage of the

14 Jul 2020 11:20 | Produced by Tolley Read more Read more