Section 599 Disposals within family of business or farm
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[(1)(a) In this section "child", in relation to a disposal for which relief is claimed under this section, includes―
(i) a child of a deceased child,
(ii) a nephew or a niece who has worked substantially on a full-time basis, for the period of 5 years ending with the disposal, in carrying on, or assisting in the carrying on of, the trade, business or profession concerned or the work of, or connected with, the office or employment concerned, and
(iii) an individual (in this paragraph referred to as "the first-mentioned individual") who resided with, was under the care of and was maintained at the expense of the individual making the disposal throughout-
(I) a period of 5 years, or
(II) periods which together comprised at least 5 years,
before the first-mentioned individual attained the age of 18 years but only if such claim is not based on the uncorroborated testimony of one witness.]1
(b) Subject to this section, where an individual who has attained the age of 55 years disposes of the whole or part of his or her qualifying assets to his or her child, relief shall be given in respect of the capital gains tax chargeable on any gain accruing on the disposal.
(c) For the purposes of paragraph (b), the capital gains tax chargeable in respect of the gain shall be the amount of tax which would not have been chargeable but for that gain.
[(d) Where the qualifying asset is land used for the purposes of farming and the consideration for its disposal consists in whole or in part of other such land, a gain shall not be treated as arising on the disposal of that other land by the child concerned but that other land shall be treated for the purposes of the Capital Gains Tax Acts as having been acquired by the individual at the same time and for the same value and used by the individual for the same purposes as it was originally acquired and used by the child concerned.]2
Amendments
1 Subs (1)(a) substituted by Finance Act 2007 section 52(1)(b)(i) as respects disposals made on or after 2 April 2007.
2 Subs (1)(d) inserted by Finance Act 2007 section 52(1)(b)(ii) as respect disposals made on or after 2 April 2007.
When does "family retirement relief" apply?
(1) If you are aged 55 or over and you dispose of qualifying assets, i.e., chargeable business assets or shares in a family company (which is a trading company, farming company or holding company) you have owned for at least 10 years ending on the di...
(2) Nothing in this section shall affect the computation of gains accruing on the disposal of assets other than qualifying assets by an individual who makes a disposal within subsection (1).
(3) Section 598(4) shall apply to a disposal within subsection (1) as it applies to a disposal within section 598(2).
(4)(a) Where assets comprised in a disposal to a child in respect of which relief has been granted under this section are, within 6 years of the disposal by the individual concerned, disposed of by the child, the capital gains tax which if subsection (1) had not applied would have been charged on the individual on his or her disposal of those assets to the child shall be assessed and charged on the child, in addition to any capital gains tax chargeable in respect of the gain accruing to the child on the child's disposal of those assets.
(b) An assessment to give effect to this subsection shall not be out of time if made within [4 years]1 after the end of the year of assessment in which the assets are disposed of by the child.
Amendments
1 Substituted by Finance Act 2003 section 17(1)(f) from 1 January 2005 (Finance Act 2003 (Commencement of Section 17) Order 2003 (SI 508/2003) para 2(f)).
What happens if my child later disposes of the assets?
(4) If the relieved assets are disposed of by the transferee child within six years of the disposal date, the deferred capital gains tax (which would have been charged on you) is to be assessed and charged on your child, in addition to the tax on the...
(5) The consideration on a disposal within subsection (1) shall not be taken into account for the purposes of aggregation under section 598(3).
