Rollover relief - No new asset purchased

Rollover relief - No new asset purchased

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Hello,

I have a corporate client who claimed roll-over relief under Section 22 - CGTA1992, sub section 247 on its 2014 CT Return. Land owned by the company was subject to a compulsory purchase order and the company received £60,000 in consideration for loss of part of an asset. The company intended to purchase a new asset within the three year deadline and claimed roll-over relief in its CT Return for the year ended 31/1/14 (the return was filed on the 2/10/14). Subsequently in March 2015 the directors decided to sell the remaining assets and liquidate the company. They opted for a long accounting period (1/2/14 - 30/4/15) to cover the sale and thus will file two CT Returns, one to 31/1/15 and the other for the three month period to 30/4/15. My question is: How should the roll-over relief claim be dealt with? Should the base cost of the remaining land be reduced by the indexed gain on the land sold or should the 2014 CT Return be resubmitted without the roll-over relief claim? Or maybe there is another option to inform HMRC of the CT now due one the gain in 2014 (incidentally, this was £44,562). Any advice would be gratefully received. Thank you.

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By Stuart.thomson
29th May 2015 06:31

Sorry I'm lost. Surely you claim rollover relief once the new asset is bought and make an amended return? In which case their is complex issue to deal with here and it is just a cessation. What am I missing?

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By bajones
29th May 2015 09:44

provisional claim

I assume the OP means that they made a provisional claim in the CT600, in which case the company just needs to withdraw the declaration of intention to reinvest.  Effectively, there is no rollover relief and HMRC will correct the return.  You can resubmit the CT600 without the claim but it's not necessary, it just might be quicker.

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By Stuart.thomson
29th May 2015 09:47

Yes makes sense. Should have worked that out.

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paddle steamer
By DJKL
29th May 2015 09:51

Surely have to correct return

Surely you have to correct the return to 31/1/14 and then work forward from that position.

The original claim has no doubt been made using provisional relief but as that has not come to fruition then surely the original tax due and the accrued interest theron now falls to be paid.

(edit- need to not be distracted when typing replies if intend to be first to the buzzer, crossed with above)

 

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By jack2013
30th May 2015 09:15

Thank you

Yes, it was easier to send in an amended CT600 - that's been done now. Thank you all for your answers.

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