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Late Holdover Claim

Late Holdover Claim

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I have just taken on board a new client, Mr X.

Apparently in 1995 he gifted his commercial property (a butcher) to his son, Mr Y. His son, Mr Y has since then shown all the rental income on his return.

However, it has become apparent that Mr X and Mr Y have never made a holdover claim on the transaction.

Do you think the Inspector would accept a late holdover relief claim 9 years late (allowing for the 5 years to make the claim)?

Can HMRC make a discovery assessment at this late stage?

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By cathygrimmer
08th Apr 2009 11:37

TMA 1970 s36
A discovery assesment could still be made under s36 if there is fraudulent or negligent conduct (there is a 20 year time limit). Presumably the gain was never declared so negligent would seem likely. However, in that case, a late claim for holdover can be made under s36(3). See here:

I haven't tried this in practice but would have thought that a letter to HMRC accompanied by a claim signed by both parties would sort this - given that if HMRC then issued a discovery assesment, the gain could be held over.


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