Gifts: who you assess: example
This guidance shows you how to go about recovering tax from a donee.
In 2011-12, A gives a property to B. The chargeable gain arising to A as a result of the gift is £48,000. A has gains on disposals of other assets which amount to £15,000 and allowable losses of £3,000. The net gains are chargeable at 28%.
A filed his Self Assessment return which included capital gains tax as follows:
|Net chargeable gains||60,000|
|Less annual exempt amount||10,600|
|Tax due||49,400 @ 28%||13,832|
A fails to pay any of the tax. In December 2014, an assessment is made on B to recover the tax on the gift.
That assessment should be made for 2014-15 and cannot exceed the lesser of:
- the amount of the gain arising on the gift (£48,000)
- the tax chargeable on the gain resulting from the gift (48,000 @ 28%) £13,440.