CG17943 - Taper relief: business asset: Assets other than shares- transfer between spouses or between civil partners and business use

Where an asset other than shares (including interests in shares and securities) has been transferred at no gain/no loss between spouses or between civil partners it can qualify at any time for the business asset taper depending on the extent to which the asset satisfies the business use tests during the combined period of ownership. It is necessary to review both the period during which the asset was held by the transferee spouse or by the transferee civil partner and the period during which the asset was held by the transferring spouse or transferring civil partner.

For the period following the no gain/no loss transfer the asset will be a business asset at any time if one of the business asset tests set out in CG17937 is satisfied by the transferee spouse or by the transferee civil partner. For the period before the no gain/no loss transfer the asset will be a business asset at any time if one of the business asset tests set out at CG17937 can be satisfied by either of the spouses or civil partners.

For example, an asset other than shares is used in a trade carried on by Mr A but is owned by Mrs A. Mrs A transfers the asset to Mr A at no gain/no loss. If he makes a disposal of the asset it will be a business asset throughout the relevant period of ownership, both before and after the no gain/no loss transfer, because of the business use by Mr A.