What’s Changing?
Starting 6 April 2027, the UK is revising how Gift Hold-Over Relief for business assets operates. Under the new rules, assets that qualify under the Substantial Shareholding Exemption (SSE) or the Intangible Fixed Assets (IFA) regime will now be included in the formula used to cap the Relief. This reforms some previously beneficial treatment for certain shareholdings when some assets in a business aren't strictly ‘trading’ in nature. (gov.uk)
Who’s Affected 💡
- Individuals gifting shares in a trading company or its holding company, especially where the company qualifies under SSE or holds intangible assets.
- Those involved in succession planning, transferring business assets within family members.
- Shareholders of companies with mixed assets—some trading, some non-trading—since the restriction formula becomes more sensitive under the updated regime. (gov.uk)
Practical Examples
| Scenario | Before 6 April 2027 | From 6 April 2027 Onwards |
|---|---|---|
| You gift shares in your personal company; all assets are trading | Full relief under old formula; SSE or IFA had little effect. | Still generous relief—little difference since all assets trading. |
| Your company holds substantial intangible assets or mixed assets | SSE or IFA often excluded from restriction → more relief. | These excluded assets are now factored in—relief may reduce. |
| Family business transition with non-trading property mixed in | Greater chance that some assets were exempted before reducing restriction. | That exemption likely removed; plan for higher tax exposure. |
Actionable Insights
- Review your holding company structure: Determine whether SSE or IFA applies and what mix of trading vs non-trading assets you own.
- Evaluate timing: Asset transfers after 5 April 2027 will fall under the new formula. Consider early transfers if financially beneficial.
- Consult professional tax advice when doing significant gifting/transfers—complex rules and nuanced calculations.
- Keep detailed records of company accounts, asset classifications (trading vs non-trading), and any SSE/IFA eligibility.