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holdover relief


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A relief against capital gains tax that may be claimed where certain assets are disposed of in the form of a gift. The effect of the relief is that the gain chargeable to tax is “held over”, so that the gain imputed to the donor is reduced to £nil. The amount by which the gain for the donor is reduced also reduces the acquisition cost imputed to the donee. This means that any gain arising from the donee's subsequent disposal of the asset will be correspondingly increased. There are currently two types of holdover relief: (1) where the capital gains tax disposal is also a chargeable transfer for inheritance tax purposes; (2) where the disposal is of a business, of shares in an unquoted trading company, or of agricultural land.

Subjects: Law.


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