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 don’t 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 isn’t usually payable on gifts to your husband, wife, civil partner or a charity.
The conditions for claiming relief depend on whether you’re giving away business assets or shares.
If you’re giving away business assets
- be a sole trader or business partner, or have at least 5% of shares and 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 (eg providing goods or services) rather than non-trading activities like investment.
Working out the relief
You don’t 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
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.
Contact HMRC or get professional tax advice if you need help.