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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Disposals by trustees: reliefs: gifts hold-over relief clawback

Under TCGA92/S74, on the death of a person with a life interest there is a claw-back ofthe held-over gain, see CG36510, but provided that this is a chargeable transfer forInheritance Tax purposes, see Appendix 4, the clawed-back gain can itself be held over.One common situation where this would not be a chargeable transfer for Inheritance tax iswhere on the death of the life tenant his or her spouse or civil partner is either thenext life tenant or becomes absolutely entitled.