This is an at a glance freeview guide to Rollover relief on the replacement of business assets. Subscribers see here for your detailed guide. 

At a glance

What is Rollover Relief?

Rollover relief applies when trading assets are sold and new 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 roll-over relief?

Group rollover relief

Assets held by individuals & used by partnerships and companies

An individual may claim roll-over relief on assets he owns which are:

See CGT reliefs: disposal of a business or its assets for the conditions to be met here.

Should roll-over relief be claimed?

Whilst roll-over 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 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 reliefs: disposal of a business or its assets for why.

Roll-over relief on compulsory acquisition - section 247

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.

Links to our useful guides:

CGT reliefs: disposal of a business or its assets
This guide provides an outline of the main Capital Gains Tax (CGT) reliefs which may apply when an individual or company replaces or disposes of a business asset, or a business, or shares in a company.

Entrepreneurs' Relief
When does Entrepreneurs' Relief apply? What is the rate of Entrepreneurs' Relief? How to claim Entrepreneurs' Relief. Case law on Entrepreneurs' Relief.