Commentary

I3.613 Hold over relief where IHT immediately payable

IHT, trusts and estates

I3.613 Hold over relief where IHT immediately payable

I3.613 Hold over relief where IHT immediately payable

To avoid immediate double taxation on certain lifetime gifts, CGT hold-over relief is available under TCGA 1992, s 2601 on gifts that are immediately chargeable to IHT (ie not potentially exempt) transfers2. This hold-over relief also extends to various disposals that are exempt or receive favoured treatment under IHT.

'Hold-over relief' is available under TCGA 1992, s 260 where an individual or the trustees of a settlement ('the transferor') make a disposal of an asset otherwise than by way of a bargain at arm's length to an individual or the trustees of a settlement ('the transferee')3 which is:

  1.  

    (a)     a chargeable transfer within the meaning of IHTA 1984 (see I3.102) (or would be but for IHTA 1984, s 195) and is not a potentially exempt transfer6. Thus, relief will be available on the transfer of property into a 'relevant property' trust7 and when property ceases to be held on such a trust (except when it occurs within three months of the commencement of the settlement or of a ten-year anniversary)8, since both of these events are chargeable transfers which are not potentially exempt. It should be noted that there will be no hold-over relief

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