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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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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