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HMRC internal manual

Capital Gains Manual

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National heritage: section 258(3) and (4) TCGA: no gain/no loss transfers

TCGA92/S258 (3) & (4)

Section 258(3) and (4) provide that certain disposals of assets of the kind listed in CG73310 are treated as no gain/no loss transactions. For this treatment to apply an undertaking as described in Section 31 Inheritance Tax Act 1984 must be given.

The disposal must be either

  • by way of gift, including a gift into settlement, or
  • a deemed disposal by a trustee under TCGA92/S71(1), see CG37100+, but not a deemed disposal on death under section 73 TCGA.

An undertaking under section 258(3) will normally include the following conditions:

  • pre-eminent objects must remain permanently in the UK (apart from temporary absences authorised by HMRC );
  • the asset must be properly maintained and preserved; and
  • the general public must have reasonable access to the asset.

The Specialist PT - IHT - Heritage Team is responsible for agreeing the undertakings. See CG73301.

The asset might have been granted conditional exemption from Inheritance Tax on the current or on some previous occasion (provided that the transfer was not a potentially exempt transfer for the purposes of that tax). If a current undertaking is or has already been given to secure the Inheritance Tax exemption there is no need for a separate undertaking for Capital Gains Tax. If there has been no occasion for the taxpayer to claim the Inheritance Tax exemption it is not necessary to agree an Inheritance Tax undertaking as a condition for agreeing to the Capital Gains Tax relief.

Specialist PT - IHT - Heritage Team will decide which undertakings are necessary and from whom.