Taxation of Chargeable Gains Act 1992 section 261

Section 260 relief: gifts to non-residents

Section 261 restricts the availability of hold-over relief under section 260 where the recipient of a gift is either not resident in the UK or is treated as resident elsewhere under a double taxation agreement.

• Hold-over relief under section 260(3) is denied where the recipient of the gift is not resident in the United Kingdom, unless the gift relates to a UK residential property interest covered by section 261ZA.
• Hold-over relief is also denied where the recipient is an individual who is UK resident but is treated as resident in another territory under a double taxation agreement.
• In that dual-residence scenario, the restriction applies where the individual would not be liable to UK tax on a gain if they disposed of the asset immediately after receiving it.
• The effect is to prevent hold-over relief being used to shift gains to recipients who would fall outside the UK's taxing reach, whether because they are non-resident or because treaty protection would shield them from UK capital gains tax.