If you swap a joint interest in land or buildings to rationalise your ownership you may be able to defer any capital gains tax that might have been chargeable as a result of the transaction.
Relief
Without special relief a change of ownership of an asset is a chargeable transaction for capital gains tax (CGT) purposes, including where you swap one asset for another even if no payment is involved.
S.248A to s.248E Taxation of Chargeable Gains Act 1992 provides that CGT relief applies to each party to the exchange, should they decide to claim it. This has the effect that the cost of the asset they acquire for CGT purposes is reduced by the amount of the gain if any resulted from the asset they transferred.
Conditions
For the relief to be available a number of conditions are imposed under s.248A:
Married spouses and civil partners are considered to be a single person for the purposes of these conditions if they are living together at the time of the exchange.
Procedure
You must claim relief under s.248A within four years of the end of the tax year you make the exchange in. Use our template letter to do this.