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

National heritage: section 258 TCGA: ‘douceur’

If CG73330 or CG73335 apply Specialist PT - IHT Heritage Team may ask you to calculate the Capital Gains Tax which would have been due on a sale in the open market.

The reason for this is because the price paid by the public body or the amount of tax satisfied by the transfer will be reduced to reflect the fact that the disposal is exempt from Capital Gains Tax. The Capital Gains Tax `saved’ is shared by the taxpayer and the recipient of the asset. The amount of the tax saving retained by the taxpayer is known as a `douceur’.

Normally, the tax `saved’ is shared as follows.

  • In the case of the transfer of land and buildings

    • 90% by the public body (or HMRC if the asset is taken in satisfaction of Inheritance Tax due);
    • 10% by the transferor of the asset.
  • In the case of a transfer of an asset other than land

    • 75% by the public body or HMRC ;
    • 25% by the transferor of the asset.

In order to calculate the douceur it is necessary to know how much Capital Gains Tax which would be payable if the asset was sold for its market value. If Specialist PT - IHT Heritage Team requires advice in any particular case you will be advised of the agreed open market value of the asset and asked to calculate the Capital Gains Tax which would be payable if the asset was sold for that amount. In making the calculation you should allow any reliefs or disposals available against the disposal of the particular asset such as principal private residence relief and the chattels exemption. You do not take account of factors such as losses and the Annual Exempt Amount.