Hold over relief

Hold over relief

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Hi , Can someone please advise me , if you have a brother and a sister in a joint tenancy that is commercial and the property is given out on lease. If the sister wants to transfer her share to the brother, can you apply for hold over relief , if not is there any other type of relief , it will be appreciated if someone can share there tax expertise , thank you

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By Paul Soper
06th Aug 2014 12:04

Possibly

There is no specific provision for the asset, as there would be if it fell within the definition of an asset used for business purposes, but if the transfer gave rise to a life-time IHT liability then hold-over relief can be claimed.  This is usually achieved by setting up a trust into which the property is transferred and then distributed again within 3 months to avoid an exit charge but... the creation of the settlement will create an IHT liability at 20% of the value in excess of the nil rate band and possibly further increase the IHT liability of both donor and donee if death occurs within 7 years.

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