Taxation of Chargeable Gains Act 1992 section 282

Recovery of tax from donee

Section 282 allows HMRC to recover unpaid capital gains tax on gifts from the recipient (donee) when the donor fails to pay the tax within 12 months of the due date.

• Where a donor fails to pay CGT on a gift within 12 months of the due date, HMRC can assess the donee for the unpaid tax, subject to a cap equal to the lower of the chargeable gain on the gift and the grossed-up amount of unpaid tax
• The donee must be assessed within two years of the date the tax became payable, and the assessment is made in the donor's name; the donee's own tax rate and capital losses are irrelevant
• A "gift" includes any transaction that is not at arm's length to the extent that value passes without full consideration, and the rules apply equally where there are multiple donors or donees, with necessary apportionments
• The provision also applies where a chargeable gain is clawed back because a settlement has become settlor-interested, in which case the transferor is treated as the donor and the trustees as the donee