Tx notes fa22 Final

6.3.
 
Availability of the relief 
(a)
The relief is only available to individuals not companies.
(b)
The claim must be made by both the donor and donee and must be made 4 years from the 
end of the tax year in which the disposal occurred. For example for a gift made in 2022/23 the 
claim must be made by 5 April 2027.
6.4.
 
Qualifying assets 
Gift holdover relief may be claimed on the gift of the following assets:
(a)
Assets used in the trade of:
‣
the donor (i.e. where he is a sole trader).
‣
the donor’s personal company (see below) (this extends the relief to assets owned by the 
individual but not used by him directly for trading purposes).
(b)
Shares and securities of trading companies provided that one of the following conditions 
apply:
‣
the shares or securities are not quoted on a recognised stock exchange or
‣
the shares or securities gifted are those of the individual’s personal company

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A company qualifies as an individual’s personal company if at least 5% of the voting rights are 
owned by the individual.
6.5. Sale at undervalue
(a)
Gift holdover relief is also available for sales made below market value, where there is an 
element of gift.
(b)
Any proceeds received in excess of the original cost are chargeable to CGT immediately.
(c)
The gift holdover relief is therefore reduced by this amount.
 
Example 9 
Richard acquired a 25% holding in an unquoted trading company in March 2006 for £60,000. He 
immediately became an employee of the company.
In March 2023 he sold the shares to his son for £85,000 when their value was £200,000. Richard and 
his son claimed relief for a gift of a business asset.