CG67030 | Relief for Gifts Subject to Inheritance Tax: Introduction

In addition to the hold-over relief available on the gift of business assets (under TCGA92/S165, see CG66880P), a similar relief can be claimed for gifts on which Inheritance Tax is chargeable.

It should be noted that, by TCGA92/S165(3)(d), if the relief under TCGA92/S260 is available then relief within TCGA92/S165 cannot apply: in essence, relief under TCGA92/S260 takes priority over relief under TCGA92/S165 .

Broadly, TCGA92/S260 works by taking the gain that would have arisen for the donor in the absence of any relief (i.e. using market value at the date of disposal, see CG66450) and, instead of bringing it into charge, deducting it from the donee’s acquisition cost (market value at the date of acquisition) of the gifted asset that they will use going forward. The implication of this is that when the donee comes to dispose of the asset themselves, their gain, if there is one, will consist of both the increase in value during their period of ownership and the donor’s gain that was held-over.