Tx notes fa22 Final

5.3. Acquisition of a new non-depreciating asset 
(a)
If a new non-depreciating asset is acquired before the deferred gain becomes taxable, rollover 
relief can be claimed.
(b)
The capital gain on the original asset is then rolled over into the new non-depreciating asset 
and the depreciating asset is, e
ff
ectively, ignored.

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6. Relief for the gift of business assets - gift holdover relief 
6.1.
 
Nature of relief 
(a)
A gift is a chargeable disposal and if the asset is a chargeable asset it will be subject to capital 
gains tax
(b)
The donor (the person making the gift) is treated as making a disposal of the asset at market 
value.
The donee (the person receiving the gift) is treated as if they acquired the asset at market 
value.
(c)
When gift holdover relief is claimed, the donor’s gain is deferred. The gain is deducted from the 
donee’s cost (market value).
 
Example 8
 
 
David bought an asset for £60,000 in June 2018. In September 2022 he gifted it to Tommy, when its 
market value was £100,000. The asset qualified for gift relief.
Assuming David and Tommy make a claim for gift holdover relief calculate Tommy’s base cost 
of the asset. 
6.2. Interaction with business asset disposal relief 
(a)
When a claim for gift holdover relief is made, the donor may lose entitlement to business asset 
disposal relief.
(b)
If the asset qualifies, then gift holdover relief if claimed is applied before business asset 
disposal relief.