Taxation of Chargeable Gains Act 1992 section 167A

Gifts of direct or indirect interests in UK land to non-residents

Section 167A ensures that gift hold-over relief under section 165 remains available when business assets comprising direct or indirect interests in UK land are gifted by a UK resident to a non-UK resident, while providing a mechanism for the held-over gain to be charged on the non-resident transferee's subsequent disposal.

• Gift hold-over relief is not denied simply because the recipient of a business asset gift is non-UK resident, provided the asset is a direct or indirect interest in UK land within the charge to capital gains tax
• The relief operates by reducing only the transferor's "relevant gain" (the portion of the gain attributable to UK land) rather than the full chargeable gain, where the disposal meets the non-residence condition
• When the non-resident transferee later disposes of the asset, the whole or a proportionate part of the held-over gain is deemed to accrue to them as a relevant gain chargeable to capital gains tax
• If the transferee's subsequent disposal is also a chargeable transfer for inheritance tax purposes, specific adjustments apply so that the inheritance tax relief interacts correctly with the deemed held-over gain