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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Qualifying corporate bonds: gifts

An individual might make a claim for a relief under TCGA 1992 section 165 for the gift of business assets. The general effect of section 165, as provided by section 165(4), is that a gain will not accrue to the transferor at the time of the transfer. The transfer may include QCBs but if the QCBs constitute a ‘new asset’ as defined in section 116, see CG53709, then under section 165 any deferred gain within section 116(10) will not accrue at the time of the transfer. Furthermore the QCBs will not be a ‘new asset’ for the transferee which would mean that the deferred gain under section 116(10) would never come into charge. Section 165(3)(c) overcomes this by disapplying section 165(4) so that the deferred gain under section 116(10)(b) comes into charge at the time of the disposal for which a claim is made under section 165.