Sarah Bradford explains what clients need to do if they receive a ‘nudge’ letter from HMRC in respect of a claim made for gift holdover relief.
Clients who included a claim for gift holdover relief in their 2021/22 tax return but failed to also include a valid claim form may have received a ‘one-to-many’ (or ‘nudge’) letter from HMRC.
Without a valid claim form signed by both parties, HMRC will not allow the gain to be held over, meaning that if the client does not rectify the situation, they will need to pay the associated capital gains tax (CGT).
Gift holdover relief
Gift holdover relief is a CGT relief that allows the gain arising on certain gifts, including those of business assets and unlisted shares, to be deferred. The relief works by reducing the transferee’s base cost by the amount of the held-over,
