Latest “One-to-Many” campaign targets rollover relief claimants

Published: 31st May 2024

Business asset rollover relief may be available where you make a disposal of a qualifying business asset, and use the proceeds to purchase another qualifying business asset. The relief allows the gain on the original asset to be deferred, wholly or partly, by rolling it over into the new asset. There is no need for the new asset to be the same type as the original, for example you could sell plant or machinery but purchase a building. As long as both assets are qualifying business assets, relief can be claimed where the new asset is purchased in the period beginning one year before, and ending three years after, the date of disposal of the original.

Often, a new asset isn’t purchased straightaway. This isn’t a problem, as you have up to three years to do this. However, to save the need to pay the capital gains tax and then reclaim it, you can make a provisional claim on the disposal where you intend to purchase an asset within the allowed window. Provisional relief then runs until the date you make a valid claim, i.e. once you have purchased the asset. You have to make a valid claim by the third anniversary of 31 January following the end of the tax year the gain arises in. As you can see, the deadline for 2020/21 will be 31 January 2025, which is why HMRC is focusing on that year.

Anyone who made a provisional claim, but has not yet made a valid claim to confirm the relief will receive a letter in due course. If you receive a letter, you should respond accordingly, i.e. to let HMRC know you have, or will, purchase an asset before 31 January 2025, or that you no longer intend to do so. If it is the latter, an assessment will be raised to recover the deferred tax, along with interest running from 1 February 2022 (the date it would have been due if not for the provisional claim).

If you are intending to purchase an asset but will struggle to do so before 31 January 2025, an extension to the deadline may be considered. The conditions HMRC will take into account are included in the letter.