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Hold-over relief
Practical Law UK Glossary 5-383-4741 (Approx. 4 pages)
Glossary
Hold-over relief
A capital gains tax deferral relief. The chargeable gain is not taxed when it arises, but instead is held over until disposal of the asset by its new owner or disposal of the new asset against which the gain has been held over. The first category (change of ownership) includes::
- Chargeable lifetime transfers, or distributions from relevant property trusts on which inheritance tax is immediately chargeable (section 260, Taxation of Chargeable Gains Act 1992 (TCGA 1992)).
- Any lifetime gift of business assets (section 165 and Schedule 7, TCGA 1992).If both section 260 and 165 relief applies (for example, because business assets are given to a relevant property trust), then the claim must be made under section 260 (not section 165).
- The transfer of assets to a non-resident company (section 140, TCGA 1992).
The second category (acquisition of qualifying asset) includes:
- The exchange of shares for qualifying corporate bonds (section 116(10), TCGA 1992).
- The disposal of assets, if a qualifying EIS investment is made by the investor at any time in the period beginning one year before and ending three years after the disposal (Schedule 5B, TCGA 1992).