Claiming Business Asset Rollover Relief allows for the deferral of Capital Gains Tax (CGT) when taxpayers sell or dispose of certain assets and use all or part of the proceeds to buy new business assets. The relief means that the tax on the gain of the old asset is effectively rolled over into the cost of the new asset with any CGT liability 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 the taxpayer expects to buy new assets but has not yet done so.
Business Asset Rollover Relief can also be claimed if taxpayers use the proceeds from the sale of the old asset to improve assets they already own.
The total amount of rollover relief is dependent on the total amount reinvested to purchase new assets.
The main qualifying conditions to be met to when claiming relief are as follows:
- you must buy the new assets within 3 years of selling or disposing of the old ones (or up to one year before);
- your business must be trading when you sell the old assets and buy the new ones; and
- you must only use the old and new assets for trading.
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.
Taxpayers must claim relief within 4 years of the end of the tax year when they bought the new asset (or sold the old one, if that happened after).
