Commentary

D1.638 Intangible rollover relief—how the relief is given

Corporate tax
Corporate tax | Commentary

D1.638 Intangible rollover relief—how the relief is given

Corporate tax | Commentary

D1.638 Intangible rollover relief—how the relief is given

In order for a company to claim rollover relief on the realisation of an intangible asset the asset realised (the old asset) and the asset acquired (the new asset) must satisfy various conditions as set out in D1.635. Where rollover relief is available, both the proceeds of the old asset and the cost recognised for tax purposes of the new, replacement asset are reduced by the 'amount available for relief'1.

Where qualifying expenditure in relation to the new asset, exceeds the realisation proceeds from the old asset, the amount available for relief is the entire gain on the old asset calculated as the excess of the proceeds over the cost of the old asset2. The 'cost of the old asset' is the total of the capitalised expenditure recognised for tax purposes, adjusted accordingly if there is a part realisation or an earlier part realisation3. Further details on part realisations are set out below.

It should be noted that it is the original cost of the asset that is deducted from proceeds, and not the tax written down value. This means that only the gain over the original cost is eligible for rollover relief. Any gain attributable to reversal of earlier writing down debits (see D1.625) will not be available for rollover relief.

Where qualifying expenditure on replacement assets is less than the realisation proceeds of the old asset, the amount available for relief is limited to the excess of the qualifying new expenditure over the

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