Holdover relief

Hold-over relief for gifts of business assets



Prior to 23 June 2010, it was possible to make an advantageous claim for entrepreneurs' relief in combination

with a claim for hold-over relief in respect of a gift or sale at undervalue of business assets under TCGA 1992 s 165. A

lthough the “held-over gain” could not benefit from the 4/9 discount, (so that the gain realised by the transferee on disposal was reduced) it may have been possible to arrange the disposal consideration so that only part of the accrued gain was held over, and part of the chargeable gain was relieved by entrepreneurs relief—(see the example below). Because the relief no longer discounts the gain, but the tax rate, it is not possible to use the relief to produce an accrued taxable gain of nil. However, if consideration is given for the asset so as to trigger an immediate gain, entrepreneurs' relief may still be claimed on that gain.