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HMRC internal manual

Capital Gains Manual

From:
HM Revenue & Customs
Published:
12 March 2016
Updated:
21 August 2026 - See all updates

CG65735 - Reliefs: Incorporation relief: Claim for incorporation relief (transfers from 6 April 2026 onwards

All statutory references in this page are to the Taxation of Chargeable Gains Act 1992 unless otherwise specified.

Where a business is transferred to a company on or after 6 April 2026, relief under section 162 requires a claim is made including such details as HMRC requires.

Form of the claim

Helpsheet HS276 will be updated for tax years 2026-27 onwards to provide customers with details of what should be included with a claim for tax year 2026-27 onwards along with general details of how incorporation relief under section 162 applies.

In most instances, the claim will be made in/with the tax return for the year of transfer. Claimants are expected to identify within the return:

  • which disposals of chargeable assets a section 162 claim is being made in respect of,
  • the total amount of relief being claimed

There is no prescribed format for the other details which are required to be provided to HMRC as part of the section 162 claim. They may be made in any form the taxpayer chooses provided the claim is made in writing. For digital returns the details of the claim should be uploaded as an attachment, for paper returns box 54 on paper SA108 can be used. The claim must include:

Business details

Details of the company the business was transferred to

  • the company name  
  • CRN (or equivalent)

Details of the shares

The calculation of how much relief and whether full or partial relief is being claimed, ideally broken down into the three stages of the computation per CG65740. The calculation should identify the following:

  • the chargeable assets of the business and each of their values at the time of transfer
  • The total value of any non-chargeable assets of the business at the time of transfer
  • The initial cost of new shares received in whole or part consideration (see CG65740).
  • Where shares only make up part of the consideration, then the value of consideration in a form other than shares should also be provided (see CG65720 and CG65745).
  • The amount of relief claimed (entered into the relevant box on the tax return). This is the amount by which the original cost of the shares is to be reduced to arrive at
  • the base cost of the new shares to be used in future.

Note that a valuation of the shares is not required or expected as the cost of the new shares required is calculable, see CG65740.

CG65740 explains the three stages referred to above in more detail. See examples given on pages CG65750 to CG65765 which demonstrate the calculation of relief HMRC requires as part of the claim in various situations.  

Timing of claim

Section 162(1) (b) provides the time limit for making a claim to incorporation relief. The claim must be made by the first anniversary of the 31 January following the tax year in which the transfer of the business took place.

Example 1: time limit for making claim

Mr Brow runs a business as a hairdresser, the chargeable assets of the business include the business premises. On 19 July 2026 he transfers his business as a going concern together with all the assets of the business excluding cash, to a company, which issues him with shares in exchange. The transfer occurs in the tax year 2026-27 so he has until 31 January 2029 to make a claim for incorporation relief.

Disposals of UK residential property

Both UK residents and non-UK residents may be required to pay CGT and file a tax return through the CGT on UK Property Account, see CG-APP18C. The filing of a return in connection with a disposal of UK residential property, along with payment of any CGT falling due on the disposal, should be done within 60 days of selling the property.

A section 162 claim does not alter the criteria for filing a return through CGT on UK Property Account.  Where it is necessary to file a return and pay tax within 60 days, for example, if incorporation relief were to be claimed in part so as to only relieve some of the gain, a claim under section 162 can be made by written request.

For both paper and digital methods of filing CGT on UK Property,

  • the amount of relief being claimed should be provided when prompted (see CG-APP18-240)
  • an accompanying attachment should contain all the information set out above,
  • and the claim should also be included in the tax return for the year of disposal.

If a UK Property Account return is completed through the online service, the required section 162 claim details should be uploaded as an attachment at this time, and if submitting a paper CGT on UK Property return, then the required claim details can be provided in a letter alongside the return.