CG60250 | Reliefs: replacement of business assets (roll-over relief): introduction

Overview

Roll-over relief allows a person to defer (‘roll-over’) a capital gain when they dispose of certain assets (old assets) and acquire other assets (new assets). If a person buys a depreciating asset, the gain is held-over instead of being rolled-over (see CG60295).

If a person plans to buy new assets with their proceeds but has not yet done so, they can get provisional relief. This gives them time to buy the new assets without paying any tax due immediately (see CG60310).

The rules for roll-over relief are set out in sections 152 to 159A of the Taxation of Chargeable Gains Act (TCGA) 1992.

This section of the manual provides detailed guidance on roll-over relief. For a general overview, see

• Business Asset Rollover Relief (GOV.UK)

• Business Asset Roll-over Relief (Self Assessment helpsheet HS290) (GOV.UK).

Main conditions

To qualify for roll-over relief, a person must:

• carry on a trade (see CG60260)

• dispose of relevant (or qualifying) assets that were used only for the purposes of the trade (see CG60270)

• acquire relevant (or qualifying) assets, that are used only for the purposes of the trade (see CG60271), within the required time limit for reinvestment (see CG60300).

The legislation at section 155 TCGA 1992 refers to relevant classes of assets, but guidance may often refer to qualifying assets instead. In the context of roll-over relief, relevant assets and qualifying assets have the same meaning.

Deemed disposal or acquisition

Roll-over relief may be available if a relevant asset is deemed to be disposed of or acquired. For example, gains arising from the deemed disposal of relevant assets under the following provisions can be deferred using roll-over relief:

• when a capital sum is derived from an asset (see section 22 TCGA 1992)

• when an asset is appropriated to trading stock (see section 161 TCGA 1992)

A deemed acquisition of a relevant asset can also form part of a claim for roll-over relief. For example, if a person acquires an asset as a legatee under section 62 TCGA 1992, this can be included in a roll-over relief claim.

Assets used in connection with oil fields

Sections 198 to 198L TCGA 1992 provide a form of roll-over relief for assets used in connection with oil fields. Further guidance is available at OT30453 to OT30479.