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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
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Gifts: computation: outright gift

A gives his business to his son B.

The only chargeable asset is goodwill which cost £4,000 in 1983 and is now agreed to be worth £15,000

A joint claim is made for relief under Section 165.

The computation is as follows

    £
     
A’s unrelieved gain on disposal is Market value at disposal   15,000
Less cost   4,000
Unindexed gain   11,000
indexation allowance (say)   1,500
  gain 9,500
The held-over gain is £ 9,500    
A: Gains before relief   9,500
Less held-over gain   9,500
Assessable gain   Nil
B: Market Value   15,000
Less held-over gain   9,500
Revised cost   5,500