Commentary

C2.1116 Rollover relief

Capital gains tax
Capital gains tax | Commentary

C2.1116 Rollover relief

Capital gains tax | Commentary

C2.1116 Rollover relief

Where land is disposed of to an authority with compulsory powers, and the whole of the consideration received is applied in the purchase of other land (excluding certain types of land; see below)1, the disposer may claim:

  1.  

    (a)     that the consideration for the disposal was such as to give rise to no gain/no loss

  2.  

    (b)     that the consideration paid for the replacement land is reduced by the excess of the actual consideration received for the disposal over the notional consideration in (a)2

It is not necessary that the authority exercises its compulsory powers; it is only necessary that the authority has such powers3. This rollover relief may be granted on a provisional basis (see below).

In Ahad's4, the appellant had acquired the right to build a restaurant on land in Milton Keynes and had had construction plans approved by the Commission for the New Towns (CNT). Local residents objected to the appellant's proposed development and he agreed to sell his interest in the land to A Ltd who wanted to build a supermarket on it. HMRC issued an assessment charging capital gains tax on the gain arising in respect of the sale. The appellant appealed. The appellant could not claim roll-over under TCGA 1992, s 152 as the original land was not used for the purpose of the trade, the restaurant never having been built. Instead, he claimed that section 247 relief (compulsory purchase relief) should be available, as the disposal was to some extent involuntary due to the

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