Company Roll over Relief - Late claims

Company Roll over Relief - Late claims

Didn't find your answer?

Hi,

If I disposed of a business asset (property) and made a gain (and paid the GCT on this). Can I subsequently claim for roll over relief on business assets purchased even if I did not inform HMR&C of my intention to buy new assets at the time of the original disposal. 

If so, are there any time restrictions on (a) the purchase of new assets (b) making a subsequent claim (c) getting part of the CGT paid, back.

Many thanks

Replies (10)

Please login or register to join the discussion.

Teignmouth
By Paul Scholes
09th Jul 2012 18:05

Claim can only be made once you have bought the replacement

Hi - as you can only make a claim once the replacement asset has been purchased, the time limit applies from the end of the tax year (or accounting year for a company) in which you buy the new asset and is 4 years.  Remember though that you can only claim for a replacement asset that you purchased at any time up to one year before or 3 years after the disposal.

So as long as the above applies you make your claim and get a refund of the CGT (CT) paid.

For the full story have a look at the HMRC manual.

Thanks (0)
Replying to lionofludesch:
avatar
By Karakal
10th Jul 2012 11:23

Hi,

Thanks for your replies.

If I understand things correctly then:

The Ltd Company (which is a 100% owned subsiduary of a UK Ltd Co) sold the asset and made the gain in September 2008. The Year end (for both Holding and Subsiduary Co's) is 31 March. 

If I understand things correctly, then provided that replacement assets are purchased by September 2011 (3 years after disposal) then all/part of CGT paid can be reclaimed. The company must make its claim within 4 years of any purchase.

If this is correct, then can the replacement assets be bought by the holding company (rather than the subsiduary [which ceased to trade on the disposal date and is registered as dormant])

Your help and advice is much appreciated.

Thanks (0)
By rohit
09th Jul 2012 21:13

Replacement asset value

just another point to add is the re-investment amount. if a shortfall then part of gain will become immediately chargeable to CGT

Thanks (0)
By Marion Hayes
10th Jul 2012 10:45

Provisional relief

Sorry Paul - I disagree.

The facility is there to claim provisional relief on the relevant return provided you state your intention to reinvest. This means that tax is not payable which could impact on the ability to reinvest. I believe the provisional claim is valid for 4 years, but if reinvestment does not happen the liability is reinstated to the origianl timeline with the usual interest and surcharge implications

Thanks (1)
Teignmouth
By Paul Scholes
10th Jul 2012 11:22

Marion

Thanks - hadn't realised you could make a provisional claim (as long as you had an intention to reinvest), have only ever dealt with reinvestments that happen near to the disposal.

Thanks (0)
By Marion Hayes
10th Jul 2012 11:45

Claim period

Assets can be purchased during the year leading up to and the three years after the sale.

A small cessation of trade can be managed around but I don't think this time period would count, and whilst I am not that up to date with groups but I doubt the asset can be bought by a different company.

 

Thanks (1)
By Marion Hayes
10th Jul 2012 11:48

@Paul

As I go a long way back I can remember times when having to pay a tax bill meant the funds were just not there to reinvest and finance was much less common. You had to actively prove you were looking for an asset if asked, but I don't see that in the guidance anymore

Comes from looking after all those farmers I guess - not very high figures by todays standards but very complex tax returns!!

Thanks (1)
Teignmouth
By Paul Scholes
10th Jul 2012 12:18

Should be OK

A plug for good old CCH Online - just discovered that if both companies were members of the same group both at sale & purchase, they can make a joint election for the claim (TCGA 1992 S175(2A)).  There's quite a bit of anti-avoidance stuff though and HMRC issued Statement of Practice SP D19, basically the group at each occasion should not have changed greatly.

(Marion) Guidance for the provisional claim is still there in CG60609 (above Act S153A - good old CCH again).  After your comment about Farmers couldn't resist clicking on CCH's reference to "ewe & suckler cow premium quotas" only to find that they no longer qualify for the relief, being a vegan I'm delighted!

 

Thanks (1)
avatar
By GAgbo
23rd Jul 2012 10:19

CGT - qualification and usage

Hi, just an emphasis on rohit's point on the value of reinvestment compared with the proceed of sale - that 100% of the proceed need reinvested in order to get full relief. 

Other twists refer to qualification and usage (the old asset must have been used 100% for business purpose - or the non-business proportion does not qualify).  Where the property has a predictable life of less than 60 years it is classed as a depreciating asset in which case, the gain is held over / deferred - not rolled-over.

 

Thanks (0)
avatar
By GAgbo
23rd Jul 2012 10:31

CGT - Individuals and Companies

Just to emphasise that individuals, including partnerships, pay CGT on their gains and companies pay corporation tax on their gains.

 

Thanks (0)