CG66450 - Reliefs: Capital Gains Tax and gifts: introduction
Source: gov.uk (2025-10-02)


Throughout this manual, all legislative references are to Taxation of Chargeable Gains Act 1992 (https://www.legislation.gov.uk/ukpga/1992/12/contents) (TCGA 1992) unless otherwise stated.

The content in this manual covers a much higher level of detail compared to say a helpsheet supporting the Self Assessment tax return. If you are looking for an introduction to the main rules for the relief for a particular year, please see the Capital Gains Tax relief on gifts and similar transactions (Self Assessmenthelpsheet HS295) (https://www.gov.uk/government/publications/relief-for-gifts-and-similar-transactions-hs295-self-assessment-helpsheet) on GOV.UK and select the tax year you are considering.

What is a gift?

The word ‘gift’ describes a transfer from one person to another either for no consideration at all or otherwise than by way of a bargain made at arm’s length. It includes gifts in settlement, see CG35700P (https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg35700p). It also includes an occasion upon which a beneficiary becomes absolutely entitled as against the trustees of a settlement, see section 71(1) (https://www.legislation.gov.uk/ukpga/1992/12/section/71) and CG37000C (https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg37000c).

Where a gift is made by way of a sale below market value, the date of disposal is determined by section 28 (https://www.legislation.gov.uk/ukpga/1992/12/section/286), see CG14250P (https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg14250p). The date of an outright gift is the date upon which the gift became effective. For a gift to be effective, it must be made in the form required by law. For example:
- a gift of land requires a deed of conveyance
- a gift of shares must be accompanied by a signed stock transfer form
- a gift of a chattel, such as jewellery, can be effected simply by handing the article over to the recipient
As an alternative, the person making the gift can execute a deed declaring that he or she holds the particular asset in trust for the recipient of the gift absolutely. This is effective for capital gains purposes from the date of signature.

Market value

Because a gift is not a bargain at arm’s length, the person making the gift (the donor) is treated as disposing of the asset at market value, see CG14480P (https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg14480p), unless it is a situation within the paragraph below headed ‘No gain, no loss transfers’.

The person receiving the gift (the donee) is treated as acquiring the asset at its market value at the time of disposal.

For information about:
- gifts of literary works, see BIM50745 (https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim50745)
- gifts of assets falling within section 258 (https://www.legislation.gov.uk/ukpga/1992/12/section/258), see CG73300P (https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg73300p)
No gain, no loss transfers

Gifts between spouses or civil partners living together or to certain bodies are treated as made on a no gain/no loss basis, see CG22200 (https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg22200) and CG66620P (https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg66620p).

If the transfer is an outright gift or for a consideration less than the allowable expenditure within section 38 (https://www.legislation.gov.uk/ukpga/1992/12/section/38), see CG15150P (https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg15150p), it is treated as a transaction producing neither a gain nor a loss. For other disposals the market value rule is suspended and only the actual consideration is taken into account.

Capital Gains Tax: what you pay it on, rates and allowances – Gifts to your spouse or charity (https://www.gov.uk/capital-gains-tax/gifts) on GOV.UK provides an overview of gifts to spouses, civil partners or charities.

Gifts back

In cases where an asset which has been gifted is subsequently returned by the donee to the donor, there are two disposals:
- one by the original donor to the original donee
- one by the original donee to the original donor