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HMRC internal manual

Capital Gains Manual

Gifts: to charities: calculation

TCGA92/S257

The rules for gifts and other bargains not made at arm’s length to charities and national heritage bodies are in TCGA92/S257. Ordinary commercial transactions are dealt with using the normal rules.

If the disposal is a gift or for a consideration less than the amount allowable under TCGA92/S38 both the disposal and the acquisition are treated as taking place for an amount which gives neither a gain nor a loss to the donor.

If the consideration for the disposal exceeds the amounts allowable under TCGA92/S38, you take into account the actual consideration which passed and not the market value.

If the disposal was made before 6 April 2008 you should include any indexation allowance due if the donor owned the asset on 6 April 1998, see CG17200+. See TCGA92/S55 (5)-(6) (CG46111 - CG46112) if the donor held the asset on 31 March 1982.

Examples

In all these examples X disposes of shares to a charity in 2010. She acquired the shares for a consideration of £100,000 at sometime after 1998.

  1. X gifts the shares at a time when they have a market value of £250,000. X is treated as having disposed of the shares for a consideration of £100,000 and the charity as acquiring them for £100,000.
  2. X sells the shares for a consideration of £75,000 at a time when they have a market value of £250,000. X is treated as having disposed of the shares for a consideration of £100,000 and the charity as acquiring them for £100,000.
  3. X sells the shares for a consideration of £150,000 at a time when they have a market value of £250,000. X is treated as having sold them for a consideration of £150,000 and the charity as acquiring them for £150,000. X has a chargeable gain of £50,000.
  4. X gifts the shares at a time when they have a market value of £80,000. X is treated as having disposed of the shares for a consideration of £100,000 and the charity as acquiring them for £100,000. X does not make an allowable loss on this transaction.
  5. X sells the shares for a consideration of £30,000 at a time when they have a market value of £80,000. X is treated as having disposed of the shares for a consideration of £100,000 and the charity as acquiring them for £100,000. X does not make an allowable loss on this transaction.