If you’re moving a business asset—like a warehouse, a shop, or company shares—to a family member or your own limited company, HMRC usually looks at the “Market Value.” Even if you don’t take a single penny in cash, they might expect you to pay Capital Gains Tax (CGT) as if you’d sold it for top dollar.
The good news? Hold-Over Relief (technically Gift Relief) allows you to hit the “pause” button on that tax bill.
How the “Relief” Works
Think of it as a relay race. Instead of paying the tax now, you “hand over” the tax liability to the person or company receiving the asset.
Your Benefit: No immediate CGT to pay.
The Recipient’s Position: They take over the asset at your original cost price. When they eventually sell it to a third party, they will pay the tax on the entire gain from the day you first bought it.
The “DLA Strategy”: Selling at a Discount
You don’t have to give the asset away for free. You can sell it to your company at an undervalue. This is a popular move for directors because it creates a balance in your Director’s Loan Account (DLA) that you can withdraw tax-free later.
The Golden Rule: If you want 100% tax deferral, the sale price should not exceed what you originally paid for the asset.
Interactive Case Study: Priya’s Creative Studio
On March 15, 2026, Priya decided to incorporate her successful design agency. She transferred her studio building to her new company, Priya Design Ltd.
Original Cost (2018): £350,000
Current Market Value (2026): £500,000
Total Potential Gain: £150,000
Let’s look at Priya’s three options:
Why the third option hurts: Because Priya charged the company £50,000 more than she paid for it, HMRC treats that “excess” as a realized profit. She has to pay CGT on that £50,000 in her 2025/26 tax return.
Pro Tip: The BADR Safety Net
If you do decide to sell above cost (perhaps to get more money into your DLA), you might be able to claim Business Asset Disposal Relief (BADR). This could bring your tax rate on that immediate “excess” gain down to just 10%.
Quick Checklist Before You Move Assets:
Is it a “Trading” Asset? Relief usually only applies to assets used in a trade, not passive investments.
Joint Election: You and the recipient must both sign a formal election form to tell HMRC you want this relief. It isn’t automatic!
Check the DLA: Ensure the sale price is recorded correctly in your company books to match your tax election.
How Oasis Can Help
Are you planning an incorporation or a family succession in 2026? Would you like us to run a “DLA Optimization Report” to find the exact price point that gives you the most tax-free cash in the future without a tax bill today?
Disclaimer
This content is for informational purposes only and is based on UK tax legislation (TCGA 1992). Hold-Over Relief is subject to complex eligibility criteria, particularly regarding “Mixed Use” assets or “Investment” companies. We strongly recommend consultation with your Oasis advisor before finalizing any asset transfers.
