Chapter 18 Rollover relief

Question 1

18.3 Conditions for the relief

Answer 1

Can only be claimed by persons carrying a trade. Sole traders and companies can claim rollover relief if they sell an asset and reinvests the proceeds in a replacement asset. The old asset must be used for the purposes of a business carried on by the trader. Rollover relief is also available where an individual owns an asset, but the asset is used by his personal company (owns at least 5% of the voting shares for it to be a personal company). If an individual is carrying on two trades at the same time, these two trades are regarded as one single trade for rollover relief purposes.

Question 2

18.4 Qualifying assets

Answer 2

Land and buildings used for purposes of trade are qualifying. Goodwill of a business is a qualifying asset and well as fixed plant and machinery. The old and new assets do not need to fall within the same category. Shares are not qualifying

Question 3

18.5 statutory time limits

Answer 3

The new asset must be acquired either within the time period of 12 months before the sale of the asset or 3 years after. Relief must be claimed within four years from the end of the tax year in which the gain arises or the new asset is acquired (whichever is later)