What the New Relief Entails
In late June 2026, HM Revenue & Customs published draft legislation titled Capital Gains Tax relief on gifts of business assets. It targets changes to the gift hold-over relief regime in the UK, effective for disposals made on or after 6 April 2027. (gov.uk)
Under the updated rules, individuals making gifts of shares or securities in a trading company — or its holding company — will face a revised formula affecting how much of their gains can be held over, especially when the company has non-trading or intangible fixed assets. Severely put, assets that were previously exempt due to Substantial Shareholding Exemption (SSE) or under the Intangible Fixed Assets (IFA) regime may now be included when calculating hold-over relief amounts. (gov.uk)
Who’s Affected
- Owners of small or family businesses, especially family members inheriting or receiving gifts of shares.
- Companies holding non-trading assets such as excess properties, investments, or items not used in the core business trade.
- Business groups under the SSE or IFA regimes. If you’re a shareholder in a holding company with intangible assets, the restriction formula changes will impact you.
Practical Examples
| Scenario | Before 6 April 2027 | On or After 6 April 2027 |
|---|---|---|
| You gift shares in a trading company with some investment property. Only non-trading assets would reduce hold-over relief partially. | Holds-over largely on trading assets only. | Both trading and non-trading assets (even if exempt-until now under SSE or IFA) will reduce relief calculation. |
| A holding company with intangible assets (like trademarks), making gifting shares. | If IFA regime covered those, they might have been exempt in calculations. | Now included, possibly reducing relief. |
How to Plan Around the Changes
- Review asset composition: assess what proportion of your company’s assets are non-trading or intangible, and understand the impact on relief amounts.
- Consider timing: where possible, make gifts before 6 April 2027 to take advantage of the current, more favorable calculation.
- Document valuations carefully: non-trading or intangible assets may need clear valuation to support relief amounts.
- Seek succession advice: estate planning, exit strategies, or family ownership transfers may need adjustment.
Strategic Considerations & Risks
- The change addresses fairness, correcting distortions in relief calculations. But it may reduce the tax benefit formerly enjoyed by some business owners.
- Not all enterprises will see dramatic effects — purely trading companies with minimal non-trading assets will feel little change. But holding companies and those with intangible fixed assets could see limitations. 16# Ensure conversations with tax professionals, particularly around valuation of intangibles and meeting reporting requirements.
Actionable Checklist for Business Owners
- Inventory all trading vs non-trading assets in your business, including intangible assets and non-core investments.
- Assess if planned gifts or transfers can occur before 6 April 2027 to lock in favorable relief.
- Consult credible valuation experts to accurately assess values of non-trading and intangible assets.
- Update shareholder agreements and business succession plans to align with new law.
Bottom Line
UK business owners face a meaningful tightening of hold-over relief calculations starting April 2027. Those serious about succession or transferring ownership through the family should start evaluating and potentially accelerating those transfers now — before the new rules restrict the value you can hold over.