My client sold land used for the farming business and made a substantial gain.
The full proceeds were reinvested in new dairy machinery which, being fixed plant and machinery, I believe entitles them to Rollover the gain. I appreciate that there are some differences in how Rollover Relief works where the reinvestment is made into a wasting asset.
My question, which I am sure is simple, is presumably in the Balance Sheet, the cost of the dairy machinery will be reduced by the held over gain? Assuming so, this will mean a reduced depreciation charge. Presumably it will also follow that a claim for Capital Allowances (AIA) will only be able to be met in respect of the net cost of the dairy machinery (cost less rolled over gain).
If anyone could confirm this, it would be a great help.