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Form of Claim

Claims to hold-over relief must be made jointly by donor and donee, except where the trustees of a settlement are the donee, in which case the claim is to be made by the donor alone.

The claim must be made using the form which accompanies HS295 whether or not the parties or party to the claim are required to complete a personal return for the tax year to which the claim relates. You should insist that the form is fully completed, in order to ensure the claim is quantified and to avoid the serious problems which have arisen in some cases from a lack of information when the asset is eventually disposed of. Due to measures put in place to stop the spread of coronavirus (COVID-19), the form can be completed using a digital signature rather than being physically signed by both transferor and transferee, until further notice.

You should not accept any claims to hold-over relief which try to limit the amount of relief to a figure of the parties’ choice (such as to utilise the donor’s available Annual Exempt Amount).

Claims must be made by the taxpayers personally, unless the donor or donee pre-deceases the claim in which case it can be made by their personal representatives.

Where the gift is to a partnership or LLP that is ‘transparent’ for Capital Gains Tax purposes, the gift is treated as being from the transferor to each of the partners/members individually and as such, a valid claim can only be made with the express consent of each of the partners receiving a share of the asset. A form signed on behalf of the partnership/LLP as a whole would be insufficient.

Time Limits

The general time limit within TMA70/S43(1) for making claims applies to hold-over relief. The claim must be made within four years from the end of the tax year in which the gift occurred.