Gift Hold-Over Relief

You may be able to claim Gift Hold-Over Relief if you give away business assets (including certain shares) or sell them for less than they’re worth to help the buyer.

Gift Hold-Over Relief means:

  • you do not pay Capital Gains Tax when you give away the assets
  • the person you give them to pays Capital Gains tax (if any is due) when they sell (or ‘dispose of’) them

Tax is not usually payable on gifts to your husband, wife, civil partner or a charity.

Eligibility

The conditions for claiming relief depend on whether you’re giving away business assets or shares.

If you’re giving away business assets

You must:

  • be a sole trader or business partner, or have at least 5% of voting rights in a company (known as your ‘personal company’)
  • use the assets in your business or personal company

You can usually get partial relief if you used the assets only partly for your business.

If you’re giving away shares

The shares must be in a company that’s either:

  • not listed on any recognised stock exchange
  • your personal company

The company’s main activities must be in trading, for example providing goods or services, rather than non-trading activities like investment.

Working out the relief

You do not pay Capital Gains Tax on any assets you give away.

You might need to pay tax if you:

  • sell an asset for less than it’s worth to help the buyer
  • make a gain on what you paid for it

Example

You sell a shop worth £81,000 to your brother for £40,000. It cost you £23,000. Include the £17,000 gain (£40,000 minus £23,000) when you’re working out your total taxable gain.

The person you give the asset to will need to include its cost when they work out the gain on the business assets or shares - if they sell them later.

How to claim

You must claim jointly with the person you give the gift to. Send your claim at the time you give them the gift.

Fill in the form in the relief for gifts and similar transactions helpsheet and include it with your Self Assessment tax return. If you send your tax return online, upload a scanned copy of the form.

HM Revenue and Customs (HMRC) has more information on claiming Gift Hold-Over Relief if you’re a trustee.

Contact HMRC or get professional tax advice if you need help.

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