CG17907 - Taper relief: qualifying holding period: no gain/loss rules

TCGA92/SCHA1/PARA2 (3)

TCGA92/SCHA1/PARA2(3) Sch A1 makes clear that the qualifying holding period for taper relief is not extended by any other no gain/no loss rules. There are four cases where existing legislation treats an asset as having been acquired by the transferee at the time that the transferor acquired it. In all of these cases the effect is specifically disapplied so that for taper relief the transferee is treated as having acquired the asset when they actually acquired it. The four cases are:

• TCGA92/S73(1)(b), where property reverts to the disponer on the death of a life tenant, see CG36457;
• TCGA92/S239(2)(b), where an asset is transferred to an employee trust, see CG36070;
• TCGA92/S257(2)(b), where an asset is gifted to a charity, see CG66644;
• TCGA92/S259(2)(b), where land is gifted to a housing association, see CG66661.

- EXAMPLE

An individual acquires an asset in June 1994 and gifts it to an employee trust in July 1999. The employee trust disposes of the asset in May 2000. If the employee trust is within the charge to Capital Gains Tax on the disposal of the asset it will be treated as having acquired the asset in June 1994 for the consideration given by the individual. For taper relief purposes the qualifying holding period of the employee trust only begins in July 1999. The qualifying holding period is less than one whole year and so the full chargeable gain is included in the taxable amount.