Illustrations - rollover relief
You'll learn how rollover relief works when you sell a qualifying asset and reinvest the proceeds into another business asset. This relief defers the capital gain on your original asset by reducing the cost base of the replacement asset, meaning you only pay tax on any proceeds you don't reinvest.
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In this lesson
- 0:00 Rollover relief introduction and qualifying assets
- 0:40 What counts as a qualifying asset
- 1:17 The four year reinvestment window explained
- 1:57 Calculating rollover relief step by step
- 2:57 Partial reinvestment and tax treatment
About this lesson
Understanding when and how to claim rollover relief is essential for managing capital gains tax efficiently across your business asset portfolio, and it's a key concept tested in the TX paper. The video covers what qualifies for rollover relief (land, buildings, fixed plant and machinery, and goodwill for individuals—but not shares), the strict four-year reinvestment window (12 months before to 36 months after disposal), and how to calculate the relief. If you reinvest all proceeds, you get full rollover relief with the gain deferred. If you keep some proceeds, you pay tax on the amount not reinvested, with the remaining gain rolled over to your replacement asset. The claim deadline is the later of four years from the end of the tax year in which you dispose of the original asset or acquire the replacement asset.
Duration: 3m
Transcript
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