Malcolm Finney outlines the two forms of capital gains tax holdover relief.
Disposals made at other than market value (e.g., gift or sale at an undervalue) are, for capital gains tax (CGT) purposes, deemed to have been made at market value. This may result in the person making that disposal facing a CGT charge yet receiving no monies from the transaction with which to discharge the liability.
This potential charge may, however, be ameliorated by the application of CGT holdover relief under TCGA 1992, ss 165 or 260.
Need for a claim
Where holdover relief is in point, the chargeable gain accruing to the transferor is not only effectively deferred but any consequent CGT charge that may arise in the future becomes that of the transferee, not
