Capital Gains Tax on Gifts UK (2026): CGT When You Give Assets Away

Yes — in England and Wales, giving away an asset is treated as a disposal for capital gains tax purposes, even though no money changes hands. HMRC treats a gift as if you had sold the asset at its market value on the date of the gift. The CGT gain is calculated as: market value at the date of the gift minus the original acquisition cost (plus any allowable costs of acquisition and improvement). You are taxed on the gain even though you received nothing. This is the 'market value rule' under s.17 and s.18 TCGA 1992. The same rule applies whether you give to a child, grandchild, friend, or a trust (unless special reliefs apply). The main exceptions are gifts to your spouse or civil partner (always CGT-exempt) and gifts of qualifying business assets (eligible for holdover relief).

Yes — gifts between spouses or civil partners living together are exempt from CGT. The transfer is treated as if the recipient acquired the asset at the same original cost as the donor — there is no disposal at market value and no CGT to pay at the time of the gift. This is called the 'no gain / no loss' rule. However, the gain is deferred, not wiped out: the recipient spouse takes over the donor's original acquisition cost. When the recipient eventually sells or gives the asset away (to someone other than their spouse), CGT will be calculated using the original base cost — including the period before the transfer. Note: the spouse exemption applies only while you are 'living together' for tax purposes. In the tax year of permanent separation, the exemption still applies for any disposal in that year, but not thereafter.

Gift holdover relief (under s.165 and s.260 TCGA 1992) allows the donor and recipient to jointly elect to defer the CGT gain on a gift, so that no CGT is payable by the donor at the time of the gift. Instead, the gain is 'held over' — the recipient takes the asset at the donor's original base cost, and when they eventually sell, they pay CGT on the combined gain (their own gain plus the held-over gain). Holdover relief is available in two main situations: (1) Gifts of qualifying business assets — shares in unlisted trading companies, assets used in a business (s.165 TCGA 1992). (2) Gifts that are immediately chargeable transfers for IHT purposes — primarily gifts into discretionary trusts (s.260 TCGA 1992). Holdover relief is NOT available for gifts of investment assets such as buy-to-let property, listed shares, or cash — for those, CGT is payable at the time of the gift.

Yes — the annual CGT exempt amount (£3,000 for 2026/27) can be used to offset any gain on a gift, just as it can on a sale. If the total gains from all disposals in the tax year (sales and gifts combined) are within the annual exempt amount, no CGT is due. However, the annual exempt amount was reduced sharply in recent years — from £12,300 in 2022/23 to £6,000 in 2023/24 and £3,000 from 2024/25 onward — so for all but the smallest gains it provides limited relief. CGT rates on gains above the exempt amount are: 18% for basic rate taxpayers and 24% for higher/additional rate taxpayers (for residential property and carried interest); 10% (basic rate) and 20% (higher rate) for most other assets.

Yes — a single gift can trigger both CGT and IHT, and both must be considered together in estate planning. CGT arises immediately on the gift (donor's gain on disposal at market value). For IHT: the gift is likely a potentially exempt transfer (PET), which is IHT-exempt if the donor survives seven years. If the donor dies within seven years, the PET becomes chargeable and the recipient (donee) may face IHT on the gift value. Where both taxes are payable (e.g. on a large gift of investment property), the estate planning cost can be considerable. Holdover relief does not help with CGT on investment property — only the seven-year PET clock and taper relief on IHT applies. For married couples, transfers to a spouse are both CGT-exempt (no/no gain rule) and IHT-exempt (spousal exemption) — making the spouse a highly tax-efficient transfer route for combined CGT and IHT planning.

Giving assets to a trust is a CGT disposal at market value, just like any other gift. However, where the trust is a qualifying discretionary trust or interest in possession trust, holdover relief may be available under s.260 TCGA 1992 — because such a transfer is normally a chargeable lifetime transfer for IHT, which is one of the qualifying conditions. If holdover is elected, the trust takes the asset at the donor's base cost and CGT is deferred until the trust disposes of the asset or distributes it to a beneficiary. Bare trusts are treated differently: HMRC looks through the trust to the beneficiary — a gift into a bare trust for a grandchild, for example, is a direct gift to the grandchild for CGT purposes and holdover relief is generally NOT available (as gifts to individuals are not chargeable IHT transfers). CGT on death is different: assets inherited through an estate receive a CGT uplift to probate value, wiping out any accrued gain.

Gifts of assets to a UK qualifying charity are exempt from CGT — there is no gain or loss on disposal. This applies to gifts of shares, property, and other chargeable assets. Additionally, there is no IHT on gifts to qualifying charities (they are fully exempt from IHT regardless of when the gift is made and regardless of the seven-year rule). Gifting appreciated assets (shares, investments) to charity rather than cash is particularly efficient: the donor avoids paying CGT on the gain, claims income tax relief on the full market value of the gift (through Gift Aid or via the payroll giving scheme for shares), and reduces the taxable estate for IHT. For example, gifting shares worth £20,000 (acquired for £5,000) to charity means: no CGT on the £15,000 gain; income tax relief on the full £20,000 value; and the £20,000 leaves the estate for IHT purposes.