188体育

In the simple case of a gift from donor to donee involving no consideration and where none of the restrictions regarding the use, occupation or nature of the asset discussed below apply, hold-over relief is calculated as in the following example:

• On 14 November 2019, Tom gifts the premises he used in his trade to Megan, in exchange for no consideration. At the date of the gift, the premises were worth 拢750,000. Tom acquired the premises on 7 June 2011 for 拢500,000.

• In the absence of any relief, Tom鈥檚 gain on the disposal (using its market value, see CG66450) would be 拢250,000

• Where Tom and Megan jointly claim for hold-over relief to be applied, TCGA92/S165(4) & (7) reduces both Tom鈥檚 gain and Megan鈥檚 acquisition cost by the amount of the chargeable gain which would have accrued in the absence of any relief (being 拢250,000)

• As a result, no gain is charged on Tom at the time of the gift and Megan鈥檚 acquisition cost is 拢500,000

In essence, the relief has 鈥榟eld-over鈥� a gain that would otherwise have been chargeable on Tom against Megan鈥檚 acquisition cost. If Megan later disposes of the premises, she will compute any gain or loss accruing on that disposal by reference to the reduced acquisition cost of 拢500,000.

Where some consideration is paid for an asset by the donee but this does not exceed the donor鈥檚 allowable costs under TCGA92/S38 (see CG15150P) then the relief works in the same way as above 鈥� so in our example, Megan could have paid Tom 拢500,000 for the premises and the computation for the relief given would be exactly the same.

If the consideration exceeds the donor鈥檚 allowable costs (excess proceeds), or other circumstances arise, then the amount of relief available is restricted, see CG66886 for these.