Illustration - gift relief
You'll learn how gift relief works when incorporating a sole trader business into a company, and why it applies when incorporation relief isn't available.
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In this lesson
- 0:00 Gift relief on business incorporation
- 0:46 Why incorporation relief doesn't apply here
- 1:15 Calculating Alex's gain with gift relief claimed
- 1:49 Base cost implications for the company
About this lesson
This illustration walks through a practical scenario where a business owner transfers assets but retains some property, triggering the need for gift relief on goodwill to defer the capital gain. You'll see how to calculate the resulting base cost for both the company's assets and the owner's shares, and understand the key condition that determines which relief applies: whether all business assets transfer to the new company. This is essential knowledge for the Taxation papers, where incorporation and gift relief scenarios appear regularly in exam questions.
Duration: 2m
Transcript
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