CG60310 - Reliefs: Replacement of Business Assets (Roll-over Relief): Obtaining Relief

Provisional Relief

Claims for Relief: Time limit and Form of Claim

Provisional Relief 

Section 153A of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) provides a mechanism for a person who has made a disposal of a qualifying asset to obtain provisional roll-over relief before they acquire new assets.

There is no claim involved in obtaining provisional relief under s153A TCGA 1992. It is obtained upon a declaration, in a return, of an intention to reinvest in new qualifying assets. One or more claims for relief will need to be made under section 152 or section 153 TCGA 1992 once the assets are acquired.

There is no specified form that must be used in order to make the declaration. For persons other than companies, an optional form on which the declaration can be made has been provided in Helpsheet 290. The declaration may however be made in any form the taxpayer chooses provided that it is attached to the return for the year in which the old asset was disposed of and identifies

  • the taxpayer and their Unique Taxpayer Reference
  • the assets which have been disposed of
  • the date of disposal of each of those assets
  • the consideration received for the disposal of each of those assets
  • the amount of the consideration received for the disposal of each of the specified assets that is to be applied in acquiring   replacement assets.

    The taxpayer can then complete their self-assessment tax return as if there had been an actual acquisition of new assets for the amount specified. The specified amount can only be increased by amending the return. When the period available for amendment has expired the specified amount can only be withdrawn or reduced.

    The amount of tax which can be deferred under a declaration for provisional relief is the amount that would have been deferred if a new asset had actually been acquired costing an amount equal to that whole or part of the proceeds on which the declaration has been made.

    Whilst provisional relief is in effect, no tax is payable in respect of the disposal of the old asset. Under section 153A(3) TCGA 1992, the declaration will cease to have effect when any of the three circumstances listed below occurs:
  • the taxpayer makes a valid claim to roll-over relief to supersede the declaration (that is they have actually acquired a qualifying new asset and claimed accordingly)
  • the taxpayer withdraws their declaration as they no longer have an intention to reinvest
  • if neither of the two points above have taken place, the declaration, and therefore provisional relief will expire on the ‘relevant day’, which is defined below.

    Note that in the case of partial reinvestment, a declaration for provisional relief can be viewed as having been partially superseded by a valid claim to roll-over relief (to the extent that there has been sufficient reinvestment, see CG60291). The balance is treated as an unfulfilled declaration that expires on the ‘relevant day’ as appropriate, unless withdrawn earlier and therefore falling within either the second or the third bullet points above.

    If the taxpayer withdraws their declaration of intent, or the declaration expires and no valid claim has been made, an assessment must be made to bring the tax from the initial disposal of the old asset into charge.

    The decision in The Commissioners for HM Revenue & Customs v Benham (Specialist Cars) Limited [2017] confirmed that this gain is correctly brought into charge by means of a discovery assessment, although section 153A(4) TCGA 1992 ensures that if the usual time limits for making such an assessment have passed, the gain can still be brought into charge by the making of an assessment or otherwise.

    Section 153A(5) TCGA 1992 defines the ‘relevant day’ as:
  • for persons other than companies, the third anniversary of the 31 January next following the tax year in which the disposal of the old assets took place
  • for companies, the fourth anniversary of the last day of the accounting period in which the disposal of the old assets took place

    Example 1

    Joe sold his trade premises on 10 March 2022 and made a gain. He made a declaration that he intends to reinvest the whole of the consideration in new assets. The relief given provisionally in respect of this disposal will expire on 31 January 2026 if the declaration has not been withdrawn or replaced with a valid claim to roll-over relief by this date.

    Example 2

    A company, Joe Ltd, sold premises in its accounting period ending 31 March 2022 and made a gain. The company made a declaration that it intends to reinvest the whole of the consideration. The relief given provisionally in respect of this disposal will expire on 31 March 2026 if the declaration has not been withdrawn or replaced with a valid claim to roll-over relief by this date.

    If the taxpayer dies while provisional relief is in place you should write to his or her personal representatives and ask them to withdraw the declaration. You should consider explaining that interest will continue to run if they do not. If the declaration is not withdrawn, you cannot raise an assessment until the relevant day. The assessment is then raised on the personal representatives. For further information about the time limits applying to assessments on the personal representatives see CH54200.

    If you raise an assessment because the relevant day has passed without a reinvestment taking place you may be asked to accept a postponement application on the basis that reinvestment will take place shortly. Such applications should always be denied.



    Claims for Relief: Time Limit and Form of Claim



    A claim must be made to obtain roll-over relief under sections 152 / 153 TCGA 1992.    

    The time limit for claims to roll-over relief is:
  • for persons other than companies, four years from the end of the year of assessment to which the claim relates, see SACM3035
  • for companies, four years from the end of the accounting period to which the claim relates, see CTM90610

    The time limit for claiming relief begins with the end of the tax year or accounting period in which the later of the following took place:
  • the disposal of the old assets
  • the acquisition of the new assets

    Example 3

    If a disposal is made by a sole trader in 2019-20 and the consideration received is reinvested in replacement business assets in 2021-22 the time limit for a claim to roll-over relief is 5 April 2025.

    Example 4

    If a disposal is made by a company in its accounting period to 30 June 2022 and a claim to roll-over relief is made in respect of a reinvestment in the accounting period to 30 June 2021 the time limit for a claim is 30 June 2025.

    A claim to relief is not prevented by the finality of an assessment on chargeable gains.

    There is no specified form that must be used in order to make a claim to roll-over relief. For persons other than companies, there is an optional form on which the claim can be made, and this has been provided in Helpsheet 290. However, the claim may be made in any form the taxpayer chooses provided that it is made in writing and identifies
  • the claimant and their Unique Taxpayer Reference
  • the assets which have been disposed of
  • the date of disposal of each of those assets
  • the consideration received for the disposal of each of those assets
  • the assets which have been acquired
  • the dates of acquisition of each of those assets, or the dates on which unconditional contracts for the acquisition of each of those assets were entered into
  • the consideration given for each of those assets and
  • the amount of the consideration received for the disposal of each of the specified assets that has been applied in the acquisition of each replacement asset.

    Wherever possible, the claim should be attached to the tax return to which it relates, or an amendment to that return.

    If a claim is sent outside of a tax return, the claimant must also sign it.

    If you receive an indication that a claim to roll-over relief is intended but the claim is not in the proper form, you should write to the claimant setting out the information which is needed to put the claim in the proper form.