This is a freeview 'At a glance' guide to Rollover relief on the replacement of business assets.

What is Rollover relief and when does it apply? What are the conditions?

Subscribers see here for your detailed guide. 

At a glance

What is Rollover Relief?

Rollover Relief applies when trading assets are sold and new trading assets are purchased using the proceeds. It is available to both individuals and companies.

For example: John sells Briar Cottage Tea Rooms for £400,000, making a gain of £100,000. He uses all of the proceeds to buy a gift shop and rolls over the gain. His CGT base cost for the shop is £300,000.

What are the qualifying conditions for Rollover Relief?

What assets qualify for Rollover Relief?

Group Rollover Relief

Assets held by individuals & used by partnerships and companies

An individual may claim Rollover Relief on assets they own personally which are:

See CGT: Rollover Relief for the conditions to be met here.

Should Rollover Relief be claimed?

Whilst Rollover Relief may seem attractive you should always consider whether deferring a gain is actually a good idea in practice. 

In particular, it may not be beneficial where the disposal of the old asset qualifies for Business Asset Disposal Relief (Entrepreneurs' Relief) but the disposal of the new asset may not.

If it is very likely that you will hold the new asset until you die then rollover may be a good idea; see CGT: Rollover Relief for why.

Rollover Relief on compulsory acquisition: section 247 TCGA

This relief may be available when land is disposed of to an authority exercising compulsory purchase powers.

See CGT: Reliefs, disposal of a business or its assets for details of when rollover will apply in this situation and what the restrictions on relief are.

Useful guides on this topic

CGT: Reliefs, disposal of a business or its assets
Which Capital Gains Tax (CGT) reliefs apply when a person replaces or disposes of an asset used by a business, the whole or part of a business, or shares in a company?

CGT: Rollover Relief
What is Rollover relief? When a capital gain is made on the disposal of a business asset, it is possible to defer the gain by rolling it over against the cost of acquiring a replacement business asset. What are the conditions for the relief? What is a business asset?

Business Asset Disposal Relief (Entrepreneurs' Relief)
Entrepreneurs' Relief (ER) was renamed Business Asset Disposal Relief (BADR) by Finance Act 2020. When does BADR apply? What is the rate of BADR? How do you claim BADR? What BADR case law is there?  

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