The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
Roll-over relief is sometimes referred to as ‘replacement of business assets’ relief, as this allows traders to defer capital gains tax (CGT) when they sell a business asset and replace it with another (ie reinvesting the proceeds).
Roll-over relief works by deferring the amount of the gain and reducing the base cost of the new asset purchased.
Full roll-over relief is not always available (see below).
Roll-over relief can only be claimed by persons carrying on a trade (eg sole traders, partners in partnership, companies or trustees / personal representatives carrying on a trade). This guidance note concentrates on claims made by individuals. For details of the rules for companies, see the Roll-over relief guidance note (subscription sensitive). For more on the rules as they apply to trustees, see the Other capital gains business asset reliefs guidance note (subscription sensitive).
Furnished holiday letting counts as a trade for roll-over relief purposes provided the income tax conditions are met. See the Furnished holiday lets guidance note.
There is no geographical restriction in the legislation for the location of the trade or the asset, but both the old asset and the new asset must be subject to UK CGT or UK corporation tax. See the end of this guidance note for a discussion on the interaction with the non-resident captial gains tax (NRCGT) rules introduced from 6 April 2015 which impose a UK CGT charge on the disposal of UK residential property by non-residents.
The old asset (ie the qualifying asset being sold) must be used for the purposes of a business carried on by the trader. Roll-over relief is also available where an individual owns an asset
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