CGT – Gift Hold-Over Relief

Gift Hold-Over Relief is a relief that defers Capital Gains Tax (CGT) when assets are given away (including certain shares) or sold for less than they’re worth to the buyer. The relief means that any gain on the asset is ‘Held-Over’ until the recipient of the gift sells or disposes of the item.

The person gifting a qualifying asset is not subject to CGT on the gift. However, CGT may be payable where the asset is sold for less than it’s worth. Gifts between spouses and civil partners don’t trigger capital gains. A claim for the relief must be made jointly with the person to whom the gift was made.

To claim relief when giving away business assets the person making the gift must:

• be a sole trader or business partner, or have at least 5% of voting rights in a company (known as your ‘personal company’)
• use the assets in their business or personal company

The person gifting the asset can usually get partial relief if they used the assets only partly for their business.

If the person is giving away shares, then the shares must be in a company that’s either:

• not listed on any recognised stock exchange
• their personal company

The company’s main activities must be in trading, for example providing goods or services rather than non-trading, investment activities.