Taxation of Chargeable Gains Act 1992 section 261ZA

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

Section 261ZA deals with the capital gains tax treatment when a UK resident makes a gift of a direct or indirect interest in UK land to a person who is not resident in the United Kingdom, ensuring that hold-over relief remains available but the deferred gain is ultimately taxed when the non-resident recipient later disposes of the asset.

• Hold-over relief under section 260 is not denied simply because the recipient of the gift is non-UK resident, provided the asset is a direct or indirect interest in UK land within the scope of non-resident capital gains tax (NRCGT).
• Instead of eliminating the gain entirely, the transferor's chargeable gain is reduced by the held-over amount, and the full held-over gain is deferred until the non-resident transferee makes a subsequent disposal of the asset.
• On a subsequent disposal by the non-resident transferee, the whole or a proportionate part of the held-over gain is deemed to accrue to them as a relevant gain subject to NRCGT, in addition to any actual gain or loss arising on that disposal.
• Where the disposal qualifies as a direct or indirect disposal of UK land meeting the non-residence condition, references in the relief provisions to "chargeable gain" are read as references to "relevant gain", ensuring the rules operate correctly within the NRCGT framework.