Mark McLaughlin highlights a selection of potential CGT traps in connection with holdover relief.
An individual who gifts a chargeable asset, for example land and buildings and family company shares, is generally treated as having received disposal proceeds equal to the market value of the asset for CGT purposes.
This can result in the donor being faced with a ‘dry’ CGT charge, as there would be no proceeds from which to pay the tax on the gifted asset. A similar problem can also arise on disposals otherwise than at ‘arm’s length’, for example sales at undervalue.
Hold on!
However, two forms of CGT holdover relief can generally be claimed if certain conditions are satisfied. The effect of those reliefs is broadly to defer (or holdover) all or part of
