HMRC’s latest one-to-many letter campaign focuses on Gift Relief claims made in 2021-22 tax returns, for Capital Gains Tax (CGT) purposes.

Nudge letters are being sent to taxpayers who included a claim for Gift Relief in their 2021-22 tax return, and, either:

  • The relevant Gift Relief claim form was not submitted.
  • The claim form was submitted, but not signed.

In both cases, the inclusion of Gift Relief on the 2021-22 tax return was likely to be invalid.

HMRC’s letter instructs affected taxpayers to take one of two courses of action within 30 days. Either:

  1. Amend the 2021-22 tax return to remove the Gift Relief claim.
  2. Submit the completed and signed Gift Relief claim form.

Failing to contact HMRC or take any action may result in the individual’s tax return being amended to remove the claim. Alternatively, HMRC may open an enquiry.

Where Additional tax is due, interest and Inaccuracy penalties may be charged.

Useful guides on this topic

CGT: Holdover/Gift Relief
Holdover relief is available when an individual makes a gift to another person (individual or company). When is the relief available? What are the conditions that apply? What restrictions are there?

CGT: How to calculate a capital gain or loss
How do you calculate a capital gain or loss? What costs are deductible? Can you set losses against capital gains?

CGT: Connected persons
Who is a connected person for Capital Gains Tax (CGT) purposes? Why does this matter?

At a glance: Reporting CGT when & how?
How do you report your capital gains? What return do you use? There are different ways for individuals to report capital gains depending on whether you are resident or non-resident, and whether you are in or out of Self Assessment. 

Penalties: Errors in Returns and Documents (subscriber version)
What penalties apply if you make an error or mistake? Is there a penalty if you fail to tell HMRC about an under-assessment? How are penalties calculated? How do you check penalties? What can you do if you receive a penalty?

External link

CIOT: HMRC nudge letters for gift holdover relief claims


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