Tax Planning
Navigating Recent U.K. Capital Gains Tax Reforms: Gifts, Businesses, and Reliefs
New UK rules around Capital Gains Tax reliefs for business asset gifts starting April 2027 will affect how individuals and family-owned companies plan their transfers.
By NomadicTax Research Team • 5-8 min read • August 1, 2026
## Overview
In June 2026, HM Revenue & Customs released a **policy paper** detailing changes to Capital Gains Tax (CGT) relief on gifts of business assets. These reforms address how assets within certain regimes—**Substantial Shareholding Exemption (SSE)** and **Intangible Fixed Assets (IFA)**—are treated when donors make gifts, impacting hold-over relief calculations. ([gov.uk](https://www.gov.uk/government/publications/capital-gains-tax-relief-on-gifts-of-business-assets/capital-gains-tax-relief-for-gifts-of-business-assets?utm_source=openai))
## What Are the Changes?
- Under current law, holders of shares or securities in trading companies or holding companies may gift assets and use **business asset hold-over relief**, avoiding immediate CGT if the recipient takes on the donor’s base cost. But assets under SSE or IFA regimes were excluded from some restrictions. ([gov.uk](https://www.gov.uk/government/publications/capital-gains-tax-relief-on-gifts-of-business-assets/capital-gains-tax-relief-for-gifts-of-business-assets?utm_source=openai))
- New law will treat those previously excluded assets as **chargeable assets**, thus including SSE or IFA assets in the formula that determines how much relief is allowed when non-trading assets are present. Essentially, this restores a more balanced restriction formula. ([gov.uk](https://www.gov.uk/government/publications/capital-gains-tax-relief-on-gifts-of-business-assets/capital-gains-tax-relief-for-gifts-of-business-assets?utm_source=openai))
## When Does It Take Effect?
- The measure applies to **disposals made on or after 6 April 2027**. ([gov.uk](https://www.gov.uk/government/publications/capital-gains-tax-relief-on-gifts-of-business-assets/capital-gains-tax-relief-for-gifts-of-business-assets?utm_source=openai))
## Who It Impacts
- Individuals gifting **shares or securities** of a trading company (or group) where it’s the donor’s personal company or unlisted shares.
- Situations involving **succession planning** where non-trading assets are part of a company/group’s holding.
## Planning Tips
1. **Review your holdings early**: Identify assets under SSE or IFA. If you have non-trading assets mixed in, the amount of relief on a gift could be limited under the new rules.
2. **Gift before the operative date**: If eligible, consider making gifts before **6 April 2027** to avoid the new restrictions for high-cost non-trading assets.
3. **Document valuations carefully**: Since the formula for hold-over relief involves valuations of trading vs non-trading assets, accurate book valuation of non-trading assets becomes more important.
4. **Seek professional advice**: Especially for mixed asset companies or private businesses, the tax difference under new rules could be material.
## Example Scenario
**Case:** Anna owns an unlisted personal company. The company holds both trading assets (core business) and non-trading assets (say, investment properties not involved in core trading). She intends to gift some shares to her daughter.
- Under current law, she might be able to claim hold-over relief generously if non-trading assets are small or excluded by SSE/IFA.
- After 6 April 2027, those non-trading assets are included in the calculation. If non-trading assets are significant, relief is reduced—meaning more of the gain is taxed at the gift stage (or later).
## What You Should Do Now
- Assess the value of non-trading vs trading assets in your business/group.
- Determine whether gifting now (before April 2027) is beneficial.
- Update your succession or estate planning accordingly.
**Takeaway:** These changes restore balance between trading and non-trading assets when you gift business assets. If non-trading assets are part of your holdings, waiting until after the change may limit the relief. Planning ahead will help minimize surprise tax bills.