Rollover relief
Rollover relief allows a chargeable gain to be deferred (rolled over) where the disposal proceeds of the old asset are reinvested in a new asset. The deferral is achieved by deducting the chargeable gain from the cost of the new asset.
Rollover relief is applied after taking into account any indexation allowance – see article Indexation Allowance
To qualify for rollover relief both the old asset and the new asset must be qualifying assets. The most relevant types of qualifying asset as far as Paper F6 (UK) is concerned are:
- Land and buildings
- Fixed plant and machinery
- Goodwill
It is not necessary for the old asset and the new asset to be in the same category.
Please note that Limited companies can only benefit from rollover relief. They cannot benefit from holdover relief for the gift of business assets – see article CGT – allowances and exempt transfers
Another major relief is available on the sale of shares of a company – the Substantial Shareholding Exemption – this is discussed elsewhere within insights and facts at Substantial Shareholding Exemption