RE2503 - Covenants and capital gifts: deeds of covenant other than deeds to charity

Non-charitable deeds of covenant still have taxation consequences if executed by

• individuals

• bodies such as Limited Companies.

Other non-charitable deeds of covenant executed by an individual have no taxation consequences as regards payments due on or after 15 March 1988 if executed

• after 14 March 1988

or

• before 15 March 1988 but the deed was first received by the Inland Revenue after 30 June 1988.

Where a covenant was executed before 15 March 1988 and the deed was received by the Inspector before 1 July 1988, there will be no taxation consequences in respect of payments due on or after 6 April 1995.