LLM8220 | Capital gains: Names: roll-over relief

Roll-over relief can be claimed where the proceeds of disposal of qualifying assets areused within a certain period of time to buying new qualifying assets. See CG60250 for fulldetails of the relief (LLM10000). The relevant assets forroll-over relief are listed in TCGA92/S155. Before 6 April 1999, syndicate capacity wasnot included in this list. This meant that roll-over relief was not available for gainsarising on the sale of syndicate capacity, and gains on other assets could not be rolledover into syndicate capacity.

FA99/S84 added syndicate capacity to the list of qualifying assets, whether held asbespoke capacity or through a MAPA. This means that, from 6 April 1999, a capital gainarising on the disposal of capacity may be deferred provided the consideration received isreinvested in another qualifying business asset within the period beginning 12 monthsbefore, and ending 3 years after, the date of the disposal.

The gain cannot be rolled over into an acquisition of capacity before 6 April 1999,although relief can be claimed on reinvestment into other qualifying business assetsacquired before that date.

Gains on the disposal of other qualifying business assets may be rolled into acquisitionsof syndicate capacity acquired after 5 April 1999.

Shares are not a qualifying class of assets for roll-over relief. Shares and otherinvestments held by a member in an ancillary trust fund (ATF) are not qualifying assetsfor roll-over relief.

Roll-over relief on conversion: FA 2004

With effect from 6 April 2004, a Name who converts to limited liability underwritingunder a Lloyd’s conversion scheme may be able to roll-over gains on syndicatecapacity and ATF assets into the base cost of shares in Nameco issued in consideration forthe transferred assets. The relief is similar to that which applies to other traders onthe transfer of a business to a company under TCGA92/S162. See LLM6160for guidance on the income tax and capital gains tax reliefs introduced by FA04.