If you can’t avoid a CGT charge on a transfer of an asset to a family member, don’t despair.
The person to whom you transfer the asset may claim a credit for the CGT that you pay against his or her gift tax liability and in this way reduce a potential double charge to a single charge.
Not every asset that is the subject matter of a gift will constitute a qualifying asset for the purposes of CGT relief. Where a single transaction such as a gift gives rise to both a CGT charge and a charge to gift or inheritance tax, the recipient may claim a credit for the CGT that has been paid against his or her gift/inheritance tax liability. The relief is given on an asset by asset basis and is restricted to the lesser of the attributable CGT and the attributable gift or inheritance tax.
To find out more about CAT and CAT tax credits, please arrange a consultation with one of our advisors.
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