Commentary

C3.511 Holdover relief for gifts of business assets—foreign-controlled UK resident companies

Capital gains tax
Capital gains tax | Commentary

C3.511 Holdover relief for gifts of business assets—foreign-controlled UK resident companies

Capital gains tax | Commentary

C3.511 Holdover relief for gifts of business assets—foreign-controlled UK resident companies

For the latest New Development, see ND.1894.

A disposal to a UK resident company does not generally qualify for holdover relief if the company is controlled by a person or persons not resident in the UK, who are connected with the transferor1. However, gifts of UK land may qualify for relief (see C3.509). Control for these purpose is as defined under CTA 2010, ss 450, 4512 (see D3.103). For the meaning of connected see (C2.110). Relief is also denied where the persons controlling the company are UK resident but are treated as resident in another territory under a double taxation agreement between that territory and the UK, so that gains on any disposal of shares or other rights in the company would not be subject to UK tax3 (see D4.106). These provisions are intended to counter 'envelope' schemes whereby assets are gifted to a UK company controlled by non-resident associates, who could otherwise sell the shares in the company free of UK

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