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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
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Gifts: computation: partial gift

Mrs X sells her business to her daughter Ms X for £10,000

The only chargeable business asset is the property which cost £4,000 in 1988 and is worth £15,000 at the date of sale. A joint claim is made for relief under Section 165.

The computations are as follows

i) Mrs X’s unrelieved gain on disposal is

  £  
     
Market value at disposal 15,000  
less cost 4,000  
Unindexed gain 11,000  
Indexation allowance 1,500  
Chargeable gain 9,500  

ii) Computation of the excess consideration-

  £  
     
Actual consideration 10,000  
Less sums allowable under Section 38 4,000  
Excess 6,000  

The held-over gain is therefore 9,500 - 6,000 = 3,500

  £
   
Mrs X: Gains before relief 9,500
Less held-over gain 3,500
Assessable gain 6,000
Ms X: Market Value 15,000
Less held-over gain 3,500
Revised cost 11,500