Sign up for our FREE monthly newsletter

Don't miss out on amazing content

Part of our vision is to share our expert insight and knowledge to help business owners achieve success. Sign up today!

Client PortalXERO LoginClient Services Brochure
Download our Client Services Brochure

Delaying tax with rollover relief

POSTED BY: Jenna Hann

19 February 18

Rollover Relief is a valuable relief that allows for a delay in the payment of Capital Gains Tax (CGT) on gains when you sell or dispose of certain assets and use all or part of the proceeds to buy new assets. The relief means that the tax on the gain of the old asset is postponed. The amount of the gain is effectively rolled over into the cost of the new asset and any CGT liability is deferred until the new asset is sold.

Where only part of the proceeds from the sale of the old asset is used to buy a new asset a partial rollover claim can be made. It is also possible to claim for provisional rollover relief where you expect to buy new assets but haven’t done so yet. Interestingly, rollover relief can also be claimed if you use the proceeds from the sale of the old asset to improve assets you already own. The total amount of rollover relief is dependent on the total amount reinvested to purchase new assets.

There are qualifying conditions to be met to ensure entitlement to any relief. This includes ensuring that you purchase the new assets within 3 years of selling or disposing of the old ones (or up to one year before). Under certain circumstances, HMRC has the discretion to extend these time limits. In addition, both the old and new assets must be used by your business and the business must be trading when you sell the old assets and buy the new ones.

Planning note

It is important to consider if it will be more beneficial to claim entrepreneurs’ relief (if eligible) and pay the CGT due at the lower 10% rate at the time of the disposal of the old asset. We would be happy to help advise you on the best course of action.

THE LATEST NEWS & BLOG POSTS FROM TEAM CB

Should I be registered for VAT?

Make sure your business complies with the latest VAT registration requirements

VAT Agricultural Flat Rate Scheme

Designed specifically for Farmers…....

Have you got a PET?!

Inheritance Tax and Lifetime Transfers