A transfer of value is exempt if or to the extent that it fulfils the following conditions:
- Ìý
(a)ÌýÌýÌýÌý it was made as part of the transferor's normal expenditure
- Ìý
(b)ÌýÌýÌýÌý it was made out of his income, taking one year with another, and
- Ìý
(c)ÌýÌýÌýÌý after allowing for all transfers of value forming part of his normal expenditure, the transferor was left with sufficient income to maintain his usual standard of living1
A loan that is a transfer of value can qualify for this exemption if, in place of requirements (a) and (b) above, it satisfies the requirement that the transfer was a normal one on the part of the transferor2.
Gift to be made as part of normal expenditure
HMRC considers that a period of three or four years is reasonable to assess whether a habit of normal giving has been established but it will consider a longer period if this assists the taxpayer in illustrating normality3. However even a single gift which shows a regular
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Web page updated on 17 Mar 2025 15:44