HMRC has issued new detailed guidance, CG65735, outlining the information taxpayers must provide when claiming Section 162 Incorporation Relief for business transfers that took place from 6 April 2026. This change is particularly relevant for landlords incorporating property businesses.
Unlike transfers completed before 6 April 2026, Incorporation Relief is no longer automatic, even if all statutory conditions are met. The Finance Act 2026 amended Section 162 TCGA 1992, requiring transferors to make a positive claim with specific information.
Claims are generally expected with the Self Assessment return for the tax year of the business transfer. Taxpayers must identify disposals covered by the claim, the total relief sought, and provide details such as a description of business activities, the transferor's entity type, and information about the receiving company. The claim must also specify the number and type of shares issued in exchange for the business, their issue date, and the calculation of the relief itself, including asset values.
HMRC has clarified that a valuation of the shares issued by the company is not required for the Section 162 calculation, though valuations of properties and other chargeable business assets remain fundamental. A new statutory deadline mandates claims by the first anniversary of 31 January following the tax year of the business transfer.
The new claim procedure does not alter the underlying conditions for Incorporation Relief, which still requires transferring a business as a going concern with all assets (other than cash) to a company, wholly or partly in exchange for shares. Partnerships and LLPs are also included in the revised guidance, with relief calculated separately for each member.