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Holdover relief

I have a client who is about to gift a derelict property to his daughter, there will be a gain of around £80k.

Daughter will sell it straight on as she & her husband are doing up a large farmhouse in France, indeed they live & work there permanently and are not UK residents.

It occurred to me that if hold-over were claimed on the first disposal, and the second disposal were not chargeable to CGT as daughter's not resident, CGT might be neatly bypassed !

Will this fly ?

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By Anonymous
11th Sep 2009 11:42

They have thought of this one!

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If they are indeed non resident, then no relief is due as the relevant conditions are not met - see TCGA 1992 s166 and 167. If the donee emigrates, the gain is recovered - see CG67271. 

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By Anonymous
11th Sep 2009 11:43

whoops!

Apologies for whatever happened to my post above - cannot now edit it!

 

By the way, would relief be due anyway - is it a business property?

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11th Sep 2009 11:52

Hold-over relief

Many thanks for the reply, I thought it was too good to be true !

It's not a business asset, but I thought hold-over applied to private assets as well ?  Have successfully claimed it in the past on a holiday home gifted to children.

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11th Sep 2009 13:37

Holdover on private assets

Holdover on gifts of non-business assets went out years ago (1989, I believe) - unless the gift is one chargeable to IHT (e.g. a gift into trust). But it is (but not for much longer) applicable to furnished holiday lettings so maybe that's why you got it on a holiday home (or maybe HMRC just didn't notice!).

And, yes, you can't get it if the transferee is not UK-resident.

Cathy

[email protected]

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