Tax Planning

Reforming UK Capital Gains Tax Relief for Business Gifts: Succession & AGM Insights

Starting April 6, 2027, UK’s new reforms will shift how Capital Gains Tax relief applies to gifts of business assets, especially impacting company founders and those planning succession.

By NomadicTax Research Team • 5-8 min read • July 17, 2026

## What's changing and who it affects The UK government has published **draft legislation** that reforms how *Gift Hold-Over Relief* under Capital Gains Tax (CGT) works for **gifts of business assets**. The change restores a pre-existing formula so **assets qualifying under Substantial Shareholding Exemption (SSE)** or the **Intangible Fixed Assets (IFA)** regime are included when assessing reductions to relief.([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)) This particularly impacts individuals who gift shares or securities in a trading company or group, especially when the company is a personal company (controlled by the giver) or involves non-trading assets. Those using relief for succession planning, gifting to family members, or restructuring ownership must take note.([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)) ## Operative date and implementation - The new rules take effect for disposals **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)) - Draft legislation is out now, allowing taxpayers and advisors to assess how upcoming changes will affect current planning.([gov.uk](https://www.gov.uk/government/publications/capital-gains-tax-relief-on-gifts-of-business-assets?utm_source=openai)) ## What does the formula change mean practically? **Current law:** Assets held under SSE or IFA are often excluded when calculating how much Gift Hold-Over Relief is reduced if non-trading assets are present. That meant some taxpayers benefitted unfairly when these regimes applied.([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)) **Under the reform:** SSE or IFA assets will now be treated as ‘chargeable assets’ for relief reduction purposes. This means: - If a company has many **trading assets**, reduction of relief will be less severe (i.e., it’s more generous). - If a company has many **non-trading assets**, relief will be reduced more than under the old formula. ## Strategic considerations & examples **Example 1:** Jane holds 90% of shares in her personal company, which mostly trades, but has owned significant intangible assets. Under current rules she gets full relief for gifting shares. After 6 April 2027, the value of intangibles will be weighed, possibly reducing relief slightly. **Example 2:** A family business with property and land (non-trading assets) plus trading activities gifts shares to the next generation. The new rules will reduce relief more because property is non-trading, so upfront gift planning may be better before the April 2027 change. ## What should advisors and business owners do now? - Review existing estate plans or gifting strategies involving SSE or IFA assets. Plan transfers before April 2027 if advantageous. - Conduct asset audits within companies to distinguish **trading vs non-trading assets** and assess their current mix. - Revalue or restructure asset ownership where possible if relief underhold-over is critical (e.g. shifting intangibles into separate entities if compliant). - Update advice to family, shareholders, or successors about the changed rules. - Monitor final legislation and HMRC guidance once draft legislation is sealed into law. ## Broader takeaways for international or globally mobile individuals - If you're non-UK resident but making gifts involving UK trading companies, these reforms could affect double taxation planning or cross-border structuring. - SSE is often used in international holdings; including SSE assets in reduction may impact foreign investors or those with international entities. These reforms underscore the importance of proactive tax planning before April 6, 2027, especially for business owners making gifts. Acting early can lock in favorable reliefs or at least adjust strategies before the new law applies.