Issues with Rollover Relief Time Limits

Gains on certain types of business assets can be rolled over into new business assets if the new assets are acquired between one year before and three years after the disposal of the old assets. This ‘rollover relief’ can be available to both companies and individuals.

Sometimes a ‘new’ asset has been acquired before the ‘old’ asset has been disposed which means that under the time limits the relief ‘could’ be denied if the ‘old’ asset is not disposed of within a year of the acquisition of the ‘new’ asset.

I say ‘could’ because HMRC have discretion to extend this period to three years if they are happy that the taxpayer has been unavoidably delayed in selling the ‘old’ asset – for example using an example of farmland the ‘old’ land could have been held to ease the transition of activities to the new land.

Unhelpfully HMRC will only agree to an extension after the ‘old’ asset has been disposed of and it is not therefore possible to gain certainty before breaching a time limit. The issue needs to be argued out at a time when HMRC can see the tax on the line.

Avoiding Uncertainty

One possible solution to avoid uncertainty is to crystallise a capital gain within the defined time limit. For example an asset could be sold to a company.

Stamp Duty Land Tax (SDLT) can be a consideration here when land is concerned but the position here should be manageable due to the fact that the trigger for SDLT is generally treated as completion of contracts whereas the point of acquisition and disposal for capital gains tax purposes is generally exchange.


  1. Company A acquires farmland for £2M on 1 January 2014.
  2. It anticipates selling some farmland for £2M sometime in 2015 giving rise to a £1.5M gain.
  3. Rollover time limits will therefore be breached and Company A does not want to risk HMRC refusing extension.
  4. Company A therefore sells (through exchange but not completion) to Company B (not in the same group) for market value before the end of 2014 thus crystallising a gain which can be rolled over.
  5. It would then be Company B which would sell to a third party purchaser.
  6. Care needs to be taken here to avoid triggering SDLT but it should generally be possible to avoid this by making use of ‘sub-sale relief’.




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