Policy paper: Capital Gains Tax relief on gifts of business assets

Individuals making a gift of shares or securities of a trading company or the holding company of a trading group where either the company is the transferor’s personal company, or the shares or securities are unlisted.

This measure incorporates assets that qualify for the substantial shareholding exemption (SSE) or are subject to the intangible fixed assets (IFA) regime into the formula that restricts the amount of gift holdover relief available when the company or group holds assets that are not used for the purposes of the company’s or group’s trade.

The measure restores how the restriction formula worked before the introduction of the SSE and IFA regime, removing distortions that can arise when calculating the amount of holdover relief available.

This measure was announced at Budget 2025. Draft legislation was published at Tax Update Day 2026.

The measure will have effect in relation to disposals made on or after 6 April 2027.

sections 165 to 169G of the Taxation of Chargeable Gains Act (TCGA) 1992, which provide for gift of business asset hold-over relief

paragraph 7 of Schedule 7 to TCGA 1992, which provides for reductions in held-over gains on the disposal of shares

section 192A and Schedule 7AC to TCGA 1992, which provides exemptions for gains on disposals of shares by companies with substantial shareholdings

section 752 of the Corporation Tax Act 2009, which provides in relation to the charge to corporation tax on non-trading gains on intangible fixed assets

The measure amends paragraph 7(2)(b) of Schedule 7 to TCGA 1992 to include as ‘chargeable assets’ those assets that would be chargeable assets but for being within the substantial shareholding exemption or the intangible fixed assets regime (such as goodwill created or acquired on or after 1 April 2002).

This measure is expected to have a negligible impact on the Exchequer.

This measure is not expected to have any significant macroeconomic impacts.

Impact on individuals, households and families