Commentary

C3.305 Rollover relief—time limit for acquisition of replacement assets

Capital gains tax
Capital gains tax | Commentary

C3.305 Rollover relief—time limit for acquisition of replacement assets

Capital gains tax | Commentary

C3.305 Rollover relief—time limit for acquisition of replacement assets

To qualify for rollover relief the acquisition of the replacement asset (or an unconditional contract for the acquisition) must take place within the period beginning 12 months before and ending three years after the time of disposal of the old asset. HMRC has discretion to extend these time limits by notice in writing1. A conditional contract to acquire a new asset made within the statutory period does not satisfy the conditions for relief unless the condition is fulfilled during the period, subject to any discretion that HMRC might exercise.

HMRC considers that the date of acquisition of a newly constructed asset or an improvement to an existing asset may be taken as the date on which the asset or works are completed and ready to use2.

In practice, the time limit for finding a suitable asset or assets for long-term deferral can effectively be extended in some cases. For example, in the case of a building it may be difficult to find the right replacement property; however, it may well be that the taxpayer regularly invests in depreciating assets such as fixed plant and machinery and

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