Taxation of Chargeable Gains Act 1992 section 168

Emigration of donee

Section 168 deals with the tax consequences when an individual who has received an asset under a gift relief claim (under section 165 or section 260) leaves the UK while still holding that asset.

• If the recipient of a gifted asset on which hold-over relief was claimed ceases to be UK resident while still owning the asset, a chargeable gain equal to the original held-over gain is deemed to arise immediately before departure
• This clawback does not apply if the recipient leaves the UK more than 6 years after the end of the tax year in which the original gift was made, or if the recipient leaves for overseas employment and returns within 3 years without having disposed of the asset
• If the recipient does not pay the resulting tax within 12 months of it becoming due, HMRC can assess the original donor for the unpaid tax, although the donor has a right to recover that amount from the recipient
• Once a held-over gain has been clawed back under this section, any future disposal of the asset is calculated without applying the original hold-over reduction, thereby preventing the same gain from being taxed twice