CG66996 - Reliefs: gifts: emigration of donee
This example also shows you how to recover a held-over gain if the donee becomes non-resident. CG66888 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.