Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
, see all updates

Gifts: computation: emigration of donee

This example also shows you how to recover a held-over gain if the donee becomes non-resident. CG67270+ tell you about this.

In year 1 B, an individual, acquired 10,000 shares worth £200,000 from A by gift. Hold-over relief under Section 165 was claimed and the held-over gain was agreed to be £50,000.

In Year 2 1,500 shares were sold by B. The proportion of the held-over gain `recovered’ on this part-disposal is 

50,000 x 1,500 = £7,500
         
    10,000    

The balance of the held-over gain is thus £42,500.

In Year 3 4,000 shares were sold by B. The proportion of the held-over gain ‘recovered’ on this part-disposal is 

42,500 x 4,000 = £20,000  
           
    8,500      

In the Year 4 B ceases to be resident (or ordinarily resident if year 4 is 2012/13 or earlier) in the UK and is assessed on the balance of the held-over gain not `recovered’ in Year 2 and Year 3, that is

50,000 - (7,500 + 20,000) = £22,500

Note: If the change of residence had occurred more than six years after the end of Year 1 no charge would be possible.