HMRC has updated the helpsheet that explains how gifts are dealt with for Capital Gains Tax purposes, and is mainly concerned with Hold-over Relief, which in effect allows liability to be deferred and passed to the person to whom the gift is made. It also covers gifts to charities, but it’s only an introduction. If you’re in any doubt about your circumstances, you should ask your tax adviser. The form has also been updated.
Relief is due automatically on: gifts to charities, Community Amateur Sports Clubs and certain other bodies. If the asset is an outright gift, or if the consideration you have received is less than your base cost, the disposal is treated as being at such a price that there’s neither a chargeable gain nor an allowable loss. If the consideration received is greater than the base cost, your calculation is based on what you actually receive for the asset.
You sell a shop to a charity for £50,000. The shop was then worth £100,000. It cost you £23,000. The chargeable gain is based on the sale price of £50,000 and is therefore £27,000.
Where a charity becomes entitled to trust property, except where any consideration has been given to anyone to achieve this situation, the trustees are treated as disposing of the property at a price that gives no chargeable gain or allowable loss. You can find out more about giving land, buildings, shares and securities to charity and in particular the Income Tax relief at Tax when your limited company gives to charity.
Further information on Capital Gains Tax relief for charities can be found here.