Taxation of Chargeable Gains Act 1992

Aggregation of spouse’s interest in the business

16 (1) In any case where—

(a) an individual makes a material disposal of business assets, and

(b) the subject matter of that disposal (whether business, assets or shares or securities) was acquired, in whole or in part, from that individual’s spouse, and

(c) that acquisition was either under the will or intestacy of the spouse or by way of lifetime gift and in the year of assessment in which occurred the spouse’s death or, as the case may be, the lifetime gift, the individual and his spouse were living together, and

(d) as a result of the acquisition the individual acquired the whole of the interest in the business, assets, shares or securities concerned which, immediately before the acquisition or, as the case may be, the spouse’s death, was held by the spouse, and

(e) not later than 2 years after the end of the year of assessment in which the material disposal occurred, the individual elects that this paragraph should apply,

the period which, apart from this paragraph, would be the qualifying period appropriate to that disposal shall be extended by assuming that, in the conditions which under section 163 are the relevant conditions applicable to the disposal, any reference to the individual were a reference either to the individual or his spouse.

(2) An election under sub-paragraph (1)(e) above shall be made by notice to the inspector.

(3) Where the acquisition referred to in sub-paragraph (1)(c) above was by way of lifetime gift, the amount available for relief on the material disposal concerned, having regard to the extension of the qualifying period under sub-paragraph (1) above, shall not exceed the limit specified in sub-paragraph (4) below.

(4) The limit referred to in sub-paragraph (3) above is the amount which would have been available for relief on the material disposal if—

(a) the lifetime gift had not occurred; and

(b) the material disposal had been made by the spouse; and

(c) anything done by the individual in relation to the business concerned after the lifetime gift was in fact made had been done by the spouse.