Gift relief for business assets ― restrictions

Produced by a Tolley Owner-Managed Businesses expert

Owner-Managed Businesses

Guidance

In certain situations, gift relief is available to defer capital gains on gifts of business assets, which would otherwise be immediately chargeable to 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:

•
CBA is the market

Continue reading

To read the full Guidance note, register for a free trial of Tolley+™

TAKE A FREE TRIAL

Popular Articles

Personal Tax

Payment of tax due under self assessment

Payment of tax due under self assessmentNormal due dateIndividuals are usually required to pay any outstanding income tax, Class 2 and Class 4 national insurance, and capital gains tax due for the tax year by 31 January following the end of the tax year (ie 31 January 2025 for the 2023/24 tax year).

14 Jul 2020 12:52 | Produced by Tolley Read more

Personal Tax

Taxation of dividend income

Taxation of dividend incomeIntroductionA dividend is a distribution of profit by a company to its shareholders.A dividend is not only a payment in cash. It can be the issue of new shares in exchange for forfeiting the right to a cash payment (a stock dividend). For more detail, see the Cash

14 Jul 2020 13:48 | Produced by Tolley Read more

Tax Returns

Trusts and Inheritance Tax

Bare trusts ― income tax and CGT

Bare trusts ― income tax and CGTThis guidance note explains how trustees of bare trusts are treated for income tax and capital gains purposes. Although a bare trust is, in equity, a type of trust, for both income tax and capital gains tax purposes its existence is transparent. This means that no tax

14 Jul 2020 15:34 | Produced by Tolley Read more

��Ƶ