Part 8Other reliefs
Chapter 3Gifts of shares, securities and real property to charities etc
Amount of relief
434The relievable amount
1
If the disposal is a gift, the relievable amount is given by the formula—
where—
V is the value of the net benefit to the charity at, or immediately after, the time when the disposal is made, whichever is less,
IC is the amount of the incidental costs of making the disposal to the individual making it, and
B is the total value of any benefits received in consequence of making the disposal by the individual making the disposal or a person connected with the individual.
2
If the disposal is at an undervalue, the relievable amount is given by the formula—
where—
E is the amount (if any) by which V (as defined in subsection (1)) exceeds the amount or value of the consideration for the disposal,
C is given by subsection (4), and
B is as defined in subsection (1).
3
But if the amount given by the formula in subsection (1) or (2) is a negative amount, the relievable amount is nil.
4
C is found by taking the following steps.
Step 1
Calculate the consideration for which the disposal is treated as made for the purposes of TCGA 1992 as a result of section 257(2)(a) of that Act (in case of disposal to charity etc, consideration to be such that no gain or loss accrues).
Step 2
Find the excess (if any) of the amount calculated at Step 1 over the amount or value of the consideration for the disposal.
If there is such an excess, C is the amount of that excess or, if less, the amount of the incidental costs of making the disposal to the individual making it.
If there is no such excess, C is nil.
5
This section needs to be read with—
a
section 435 (incidental costs of making disposal),
b
section 436 (consideration), and
c
sections 437 to 440 (value of net benefit to charity).
435Incidental costs of making disposal
References in section 434 to the incidental costs of making the disposal to the individual making it are to—
a
fees, commission or remuneration paid for the professional services of a surveyor, valuer, auctioneer, accountant, agent or legal adviser which are wholly and exclusively incurred by the individual for the purposes of the disposal,
b
costs of transfer or conveyance wholly and exclusively incurred by the individual for the purposes of the disposal,
c
costs of advertising to find a buyer, and
d
costs reasonably incurred in making any valuation or apportionment required for the purposes of this Chapter.
436Consideration
1
For the purposes of the formula in section 434(2) consideration for the disposal is brought into account—
a
without any discount for postponement of the right to receive any part of it,
b
in the first instance, without regard to a risk of any part of it being irrecoverable, and
c
in the first instance, without regard to the right to receive any part of it being contingent.
2
If—
a
any part of the consideration so brought into account subsequently proves to be irrecoverable, and
b
a claim is made,
such adjustment as is required in consequence must be made.
3
An adjustment under subsection (2) may be made by way of discharge or repayment of tax or otherwise.