Business Relief (2) Flashcards
Where can gift holdover relief be claimed?
On gifts of business assets
What if an individual gives away a qualifying asset?
The transferor and transferee can jointly claim within four years of end of the tax year of the transfer
What happens to transferor’s gain amd transferee within four years of end of the tax year of the transfer?
Transferor: Reduced to nil
Transferee: Acquire the asset for market value at date of transfer - transferor’s deferred gain
Conditions for gift holdover relief? (Disposal)
Disposal is made to an individual who is UK resident
Disposal of a business asset used in donor’s trade
Conditions for gift holdover relief? (Share)
Unquoted shares in a trading company
Quoted shares in a personal trading company
When is there a restriction on a gift holdover relief claim?
If the asset is sold at less than market value
Where are disposals by way of sales at undervalue chargeable?
To capital gains tax with proceeds deemed to be market value
What happens if transferee moves abroad within six years of the disposal?
Deferred gain becomes taxable on transferee immediately before they leave the country
What is taxed immediately in gift holdover relief?
Excess of actual proceeds received over the original cost
What happens to rest of the gain in gift holdover relief?
Held over into the base cost for a subsequent disposal of the asset
What happens where taxpayer’s personal company has investments in its net assets?
Gift holdover relief is restricted
What may not be eligble for relief?
Gain on gift of shares
Where is rollover relief available?
For both companies and individuals
WHat does rollver relief allow?
Taxpayer to delay tax liability on capital gain to extent that proceeds from sale of a business asset are reinvested in new business assets
What happens to any proceeds not reinvested in a qualifying asset in rollover relief?
Are deducted from gain to be rolled over and are taxed immediately
