Tristan Noyes points out that gifting assets can trigger capital gains tax for the donor and explores ways to gift the tax along with the asset. â¯
People are sometimes surprised that they can trigger capital gains tax (CGT) if they gift an asset or sell it at undervalue. Unfortunately, that is what the tax law requires.
Suppose that I have a piece of art worth £30,000 and I gift that to my cousin. I am treated as if I sold it for £30,000 and I am liable to CGT on any capital gain realised. My cousin is treated as if he bought it for £30,000.
However, there are circumstances in which I can avoid the CGT by making a ‘holdover relief’ claim. In this case, the gain effectively passes with the gift to the recipient.
When holdover applies
Gains can be held over in two scenarios: <>
