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HMRC internal manual

Capital Gains Manual

Gifts: Hold-over relief: recovering held-over gains

TCGA92/S168 & TCGA92/S67 (6)

This guidance tells you what to do when you find out that a person has become non-resident, see CG67270, and your review of the forms CG130 shows that there are held-over gains to be recovered.

In the case of an individual TCGA92/S168, which is applied to held-over gains under Section 79 Finance Act 1980 by TCGA92/S67 (6), provides that the held-over gain is treated as a chargeable gain of the donee in the year of change of residence. CG67286+ tell you how to decide what requires assessing. CG67360+ tells you how you can assess the donor if the donee fails to pay the tax.

When you recover held-over gains

You will have to do this in cases where

  • hold-over relief has been given in respect of a disposal of an asset


  • before the donee has wholly disposed of the asset, they become neither resident nor ordinarily resident in the UK in the years up to and including 2012/13


  • before the donee has wholly disposed of the asset, they become not resident in the UK for the year 2013/14 or a subsequent year.

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Time-limits: Individuals

TCGA92/S168 (4)

You cannot recover a held-over gain where an individual donee becomes non-resident in the UK more than six years after the end of the year of assessment in which the held-over gain arose. In those circumstances, that gain is not brought back into charge when the donee becomes non-resident.

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Before 19 March 1991 the same provisions applied to trustees except for the six year time limit. Since then when trustees become non-resident they are treated as disposing of all their assets at market value, which effectively means the held-over gains are recovered and no separate provisions are needed. See CG38200.

If trustees become non-resident or, although remaining resident, are treated as non-resident by a Double Taxation agreement, a report should be made to Specialist PT Trusts & Estates under CG38400+. They will take responsibility for determining amounts to be assessed in respect of the change of residence.

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If you have to deal with a case where a company has gone non-resident, you will find the rules for Company migration in TCGA92/S185. CG42370 tell you about these rules.