Roll-over relief for intangible fixed assets
Produced in partnership with Anne Fairpo of Temple Tax Chambers
Roll-over relief for intangible fixed assets

The following Tax practice note Produced in partnership with Anne Fairpo of Temple Tax Chambers provides comprehensive and up to date legal information covering:

  • Roll-over relief for intangible fixed assets
  • Conditions for relief
  • Conditions for relief—old asset
  • Conditions for relief—new asset
  • Calculation of the relief
  • Example
  • Part realisations
  • Effect on amortisation
  • Example
  • Roll-over relief and groups
  • More...

A company can obtain roll-over relief, under the intangible fixed assets regime (IFA regime) to defer the tax charge on gains on realisation of intangible fixed assets (including certain realisations of pre-1 April 2002 intangible fixed assets). The relief involves setting the gain against the acquisition cost of new intangible fixed assets directly, or against the acquisitions of new intangible fixed assets by other group companies.

Note: the legislation refers to the relief as 'roll-over relief in case of realisation and reinvestment', but HMRC refers to it as 'reinvestment relief'. This Practice Note follows the legislation and refers to the relief as 'roll-over relief'.

The rules are similar to the roll-over relief rules for capital gains of companies, although note that some of the simplification measures introduced for corporate capital gains in the Finance Act 2011 have not been incorporated into the corporate intangibles rules. For more details, see Practice Note: Rollover relief for business assets.

One key difference between the roll-over relief under the IFA regime and capital gains roll-over relief is that, due to the effect of amortisation, roll-over relief under the IFA regime may be a limited deferral of the tax due on the gain on disposal and not a potentially indefinite deferral.

Non-corporate entities can obtain roll-over relief in respect of certain intangible assets under the capital gains tax rules, namely:

  1. goodwill, and

  2. certain

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