Taxation of Chargeable Gains Act 1992 section 167

Gifts to foreign-controlled companies

Section 167 restricts the availability of gift relief under section 165 where a business asset is transferred to a company controlled by non-UK resident persons connected with the person making the gift.

• Gift relief (holdover relief) under section 165 is denied where the recipient company is controlled by non-UK residents who are, or are connected with, the person making the disposal.
• Control means a person or persons who are both non-UK resident and connected with the donor hold sufficient interests to control the recipient company.
• A UK-resident person who controls a company may be treated as non-resident if a double taxation agreement regards them as resident in another territory and shields them from UK tax on gains from disposing of the relevant assets.
• An exception applies under section 167A for gifts of UK residential property interests to non-residents, where different rules may permit relief.