Tax Planning
Tax Planning via Gift-Hold Over Relief: Structuring Gifting of Business Assets Post Budget 2025
With reforms to gift hold-over relief coming from 6 April 2027, understanding who qualifies and how to structure gifts now can lead to major tax savings.
By NomadicTax Research Team • 5-8 min read • July 15, 2026
## What is Gift Hold-Over Relief?
Gift Hold-Over Relief lets you **defer Capital Gains Tax (CGT)** when giving away certain business assets or shares—if the donee sells later they inherit cost basis reduced by the held-over gain. Traditionally used in business succession, gifting unlisted shares, trading company shares, or agricultural / business property. ([gov.uk](https://www.gov.uk/gift-holdover-relief?utm_source=openai))
## Recent Reform: What’s Changing?
According to HMRC’s June 2026 draft legislation:
- The formula that restricts relief when the company holds **non-trading assets** will now **include assets under the Substantial Shareholding Exemption (SSE)** or **Intangible Fixed Assets (IFA) regime** in determining reduction. Thus, companies with intangible or exempt-under-SSE assets will have less generous 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))
- Reform becomes operative 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))
## Who Will Be Affected & Examples
### Affected individuals:
- Those gifting shares in companies with significant non-trading or intangible assets
- Family businesses seeking to transfer ownership
- Non-resident individuals with UK business interests giving gifts to UK residents or vice versa
### Examples:
- **Family business**: Sarah owns 100% of a trading company but also holds intangible assets (e.g., patents) under IFA regime. Under old rules, her child would receive gift hold-over relief largely unaffected. Under new rules: value of intangible assets will be taken into account, reducing relief. It may make sense to gift before April 2027 or cleanse the asset mix.
- **Non-resident gift**: Raj, non-UK resident, gifts shares in his UK-based company (with some exempt SSE assets) to a UK resident. Relief may be reduced under new rule. He should review eligibility and think about timing of the gift.
## Actionable Planning Tips
1. **Review your asset portfolio now** — identify non-trading assets, intangible fixed assets, or SSE-exempt holdings.
2. **Consider making gifts before 6 April 2027** especially if you have mostly trading assets.
3. **If non-trading/intangible assets are present**, consider restructuring: sell or separate them from trading business before gifting.
4. **Plan advance valuations** and ensure accurate accounting to avoid surprises.
5. **Claim relief correctly**, jointly with donee, keep relevant records and dates clear—forms must be filed correctly with Self Assessment.
## Risks & Caveats
- Post-change, relief will be **less generous** if non-trading or intangible assets constitute a large share of asset base.
- Early gifting before rules change may have inheritance tax or exposure risks—consider full tax consequences.
- Good documentation vital—unclear asset classification may lead to HMRC challenges.
Understanding these changes lets business owners act proactively rather than reactively. If you’re considering gifting business assets, timing and structure matter more than ever.