Pre-owned asset tax overview

Produced by a Tolley Personal Tax expert

Personal Tax

Guidance

STOP PRESS: At Spring Budget 2024, the Chancellor announced that the remittance basis would be abolished from 6 April 2025, although this only applies to foreign income and gains arising on or after that date. The remittance basis rules still apply to unremitted income and gains arising before that date but remitted later. For more details, see the Abolition of the remittance basis from 2025/26 guidance note.

This guidance note outlines the circumstances in which the pre-owned asset tax (POAT) applies, with links to detailed guidance on exemptions, exceptions and scope.

The pre-owned asset tax is an income tax charge anti-avoidance measure. It is designed to address gaps in the inheritance tax rules where individuals give away wealth, but continue to benefit from it.

Retaining the benefit of gifted assets

Where an individual gives away an asset and continues to benefit from it (or may benefit from it), it is likely that for Inheritance tax it will be treated as a gift with reservation (see the Gifts with reservation ― overview guidance note).

Where

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