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Gift relief


Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Gift relief


Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
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Tax treatment of gifts

One option for passing on the family business to future generations is to gift the shares in the family company or the assets used in the business to the relevant recipients. A gift is a disposal for capital gains tax purposes and despite not receiving any money from the recipient, the donor could have CGT to pay. To calculate the donor’s capital gain, sale proceeds are deemed to be equal to the market value of the asset at the date of the gift. This rule applies whether or not the donor and the donee are connected persons. The deemed proceeds (ie market value) are also the donee’s base cost for CGT purposes. To mitigate this cash flow problem, in certain situations, business asset gift relief (also known as gift relief or hold-over relief) is available to defer the donor’s gain on gifts of qualifying business assets.

Business asset gift relief

Gift relief operates in a similar way to rollover relief. The gain on the donor’s gift is deferred by rolling over this capital gain

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  • 30 Jul 2024 11:10

Home/ Tolley Tax Guidance/ Owner-Managed Businesses / Exiting the business and succession planning

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