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Overview

Where a capital gain has been realised on an asset that has been disposed of and that disposal was not for full value (that is not in an arm’s length sale) then holdover relief may be available. This will happen when trustees appoint capital assets from a trust.

Holdover relief allows any gain arising to be deferred and rolled into the base cost of the beneficiary receiving the asset.

It may be available where the asset is a business asset or agricultural property (under TCGA 1992, s 165) or where the transfer is from a relevant property trust or other special trust (under TCGA 1992, s 260).

Where both could apply, relief under s 260 will take precedence.

There are however some restrictions that will be applied to either deny or mitigate holdover relief and these are covered below. A holdover claim is an all or nothing claim and cannot be restricted. It applies before any annual exemption is deducted.

Holdover relief is available to trustees but not to personal