Rollover relief
You'll learn how rollover relief works when you dispose of a qualifying asset and reinvest the proceeds into another asset used in your trade.
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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 immediate tax liability
About this lesson
This video covers the qualifying assets eligible for relief (land, buildings, fixed plant and machinery, and goodwill for individuals), the critical four-year reinvestment window (12 months before to 36 months after disposal), and how to calculate relief when proceeds are fully or partially reinvested. Understanding rollover relief is essential for TX and ATX papers, as it allows you to defer capital gains tax and reduce your immediate tax liability when you're replacing business assets. The calculation is straightforward: if you reinvest all proceeds, the full gain is rolled over by reducing the cost base of your replacement asset, deferring the tax. If you only reinvest part of the proceeds, you pay tax on the gain attributable to the amount kept, and roll over the remainder. This relief is particularly valuable for business owners managing asset replacements, as it preserves cash flow and allows you to restructure your asset base without triggering an immediate tax bill.
Duration: 3m
Transcript
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