Introduction to this document

CGT rollover relief claim

When you’ve sold an asset that was used in your business, and this results in a capital gain, it’s possible to defer or even avoid tax on this by claiming rollover relief.

Selling a business asset

Capital gains tax (CGT) applies to profit you make when you sell a business asset. If this results in a CGT bill you have the option to make a CGT Rollover Relief Claim to roll over the gain into the purchase of another business asset and so defer payment of tax.

Qualifying assets

Rollover relief is only available on the sale of qualifying business assets. This includes business goodwill, land and buildings and fixed plant and machinery. Unfortunately, shares are not a qualifying asset.

Amount of relief

Where relief is claimed it’s said to be rolled over because it’s deducted from the cost of the replacement asset, therefore increasing the gain or reducing the loss when it’s sold. The amount of rollover relief depends on whether you fully invest the proceeds of the sale. If you only re-invest part of the proceeds, then the relief will be restricted to the amount re-invested.

Time limits

The replacement asset must be acquired within a period starting one year before and three years after the date of the disposal of the original asset. The time limit for making the rollover relief claim is four years from the end of the tax year in which the old asset was sold.