Capital tax relief

Question 1

What is replacement of business asset relief and what are the two types?

Answer 1

Gain from disposal of qualifying business assets can be deferred if they are reinvested within period

Rollover relief: rollover base cost of new asset
Holdover relief: freeze gain until chargeable if proceeds used to purchase depreciating asset (max UL of 60yrs)

Question 2

What is a qualifying asset and qualifying period? What is the base cost?

Answer 2

QA= L&B, fixed P&M, ships, aircraft
QP= 1 year before, 3 year after sale (4 year from whatever comes first, sale/purchase)

Base cost= New asset - deferred gain

Question 3

In terms of replacement of business asset relief, what is chargeable?

Answer 3

Lower of amount not reinvested and full gain from disposal.

Also private portion of asset is immediately chargeable