Rollover relief

Rollover relief

Didn't find your answer?

The answer to this may be obvious but since I have some doubts I'd be grateful if the experts would confirm that I am correct (or indeed wrong).

Company sells asset A that was used for 6 out of 10 years for trade purposes. Proceeds are £400k and gain is £100k. It reinvests £360k in a new qualifying asset. My understanding of the legislation is that the disposal of A is treated as two separate disposals, giving rise to a qualifying gain of £60k and a non-qualifying gain of £40k. As far as I can tell, there is no need to apportion the amount reinvested, so that the qualifying gain of £60k is fully covered by the £360k reinvestment and therefore fully held over. Is this correct?

Replies (1)

Please login or register to join the discussion.

By Steve Kesby
20th Feb 2015 14:41

I agree

You make an apportionment of the disposal proceeds of asset A, but if the whole amount of the proceeds apportioned to the business part (the £60K gain) are then reinvested in qualifying assets, then s. 153 will not even come into play.

You have two assets:

A1,  the business asset, proceeds £240K, gain £60K, and

A2, the non-business asset, proceeds £120K, gain £40K.

You have then spent £360K on new business assets.

If A1 and A2 were actually separate assets, would you still be asking the question?

Thanks (0)