Illustration - incorporation relief
You'll learn how incorporation relief works when a business owner transfers assets to a newly incorporated company, and how to calculate both the immediate chargeable gain and the base cost of shares received.
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In this lesson
- 0:00 Business incorporation and chargeable gains overview
- 1:00 Identifying assets subject to capital gains tax
- 1:52 Calculating gains on freehold premises and goodwill
- 2:22 Understanding base cost with incorporation relief
- 2:58 Partial incorporation relief with cash consideration
- 3:35 Calculating market value of shares received
- 4:16 Determining chargeable gain with partial relief
About this lesson
This illustration walks through two scenarios—one where consideration is given wholly in shares (automatic relief) and one where the owner receives both cash and shares (partial relief)—showing you how to identify which assets are chargeable to capital gains tax, apply the relief rules correctly, and work out the deferred gain that will affect future share disposals. Essential for understanding how incorporation relief interacts with capital allowances and how to handle mixed consideration in practice.
Duration: 5m
Transcript
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