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HMRC internal manual

Capital Gains Manual

Gifts: Inheritance Tax: introduction


Section 260 TCGA gives hold-over relief for gifts on which Inheritance Tax is chargeable. It applies to disposals made on or after 14 March 1989.

Finance Act 2004 introduced changes for disposals on or after 10 December 2003 to the trustees of settlements in which the settlor has or may get an interest. The instructions at CG67064 describe these rules.

Finance Act 2004 also introduced rules that restrict the availability of private residence relief in relation to disposals on or after 10 December 2003 if the cost of acquisition (for CGT purposes) of the dwelling house disposed of is affected by relief under TCGA92/S260 in relation to an earlier disposal (or series of earlier disposals). See CG64204, CG64933 and CG65440.

Finance Act 2006 made significant changes to the Inheritance Tax treatment of settlements. See CG36525+ for a description of these changes. Although Finance Act 2006 made only two minor amendments to section 260 the impact of the Inheritance Tax changes will increase the availability of relief under section 260.