HOLD-OVER RELIEF FOR CGT
04/04/2009
For CGT a gift of a chargeable asset is regarded as a disposal at open market value (except for spouse/civil partner transfers) and the chargeable gain or allowable loss is computed in the usual way.
CGT has historically been reduced in the following ways:
a) by a full or partial exemption;
b) by a deferral of the liability, with the possibility of future liability facing the same taxpayer;
c) by a deferral of the liability and with the possibility of future liability falling on the recipient of the gift, not the donor
Hold-over relief is in the third category as the effect of making a hold-over claim is to reduce the donee’s acquisition cost to that of the donor plus any allowable expenditure. It does not remove the CGT liability it simply defers it.
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