CG60310 - Reliefs: Replacement of Business Assets (Roll-over Relief): Claiming Relief
Time Limit for Claiming Relief
Time Limit for Claiming Relief
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.
In some cases, there may be an extended time limit. For further guidance about when this applies see CG13751.
If a claim is made late and you are asked to extend the time limit see CG13800 and CG13810.
The time limit for claiming relief begins with the end of the year of assessment 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 1
If a disposal is made by a sole trader in 2014-15 and the consideration received is reinvested in replacement business assets in 2016-17 the time limit for a claim to roll-over relief is 5 April 2021.
Example 2
If a disposal is made by a company in its accounting period to 30 June 2017 and a claim to roll-over relief is made in respect of a reinvestment in the accounting period to 30 June 2016 the time limit for a claim is 30 June 2021.
A claim to relief is not prevented by the finality of an assessment on chargeable gains.
Form of Claim
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, it must also be signed by the claimant.
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.
Raising Assessments
If a claim form has not been received by the normal time for payment of the tax on the gains accruing on the disposal of the old assets, you should raise an assessment at this time. You should not wait until the three year replacement period has expired. You can amend the assessment if you subsequently receive a valid claim to relief.
There is an exception for cases falling within SP D6 (see CG60300).
Requests for Postponement
You can accept an appropriate postponement application if the claimant can demonstrate an intention to acquire a qualifying asset shortly after the normal payable date for the tax and within the normal three year time limit. This is not to say that a postponement application should be accepted on the basis of such an intention during the normal three year time limit. If a qualifying asset is to be acquired sometime after the normal due date for the tax, no postponement application should be accepted. You should consider explaining that interest may be payable on any postponed tax on a gain that is not eventually rolled over.
The possibility that all or part of the asset disposed of may not have been a qualifying asset should be borne in mind when considering a postponement application. For more information about qualifying assets see CG60280+.
Provisional Claims
S153A TCGA92 allows any person who has made a disposal of a qualifying asset to obtain provisional roll-over relief if they declare in their return an intention to acquire new assets.
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 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 amount of the consideration received for the disposal of each of the specified assets that is to be applied in the acquisition of each replacement asset.
The claimant 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 declared when a provisional claim is made 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 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 the provisional claim is in effect, no tax is payable by the claimant in respect of the disposal of the old asset. Under S153A(3) TCGA92, a provisional claim will cease to have effect when any of the three circumstances below occurs:
- The claimant replaces their provisional claim with a valid claim to roll-over relief (i.e. they have actually acquired a qualifying new asset and claimed accordingly)
- The claimant withdraws their provisional claim, as they no longer have an intention to reinvest
- If neither of the two points above have taken place, the claim will expire on the ‘relevant day’, which is defined below.
Note that in the case of partial reinvestment, a provisional claim 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 provisional claim that is either withdrawn or expires on the ‘relevant day’ as appropriate and therefore falling within either the second or the third bullet points above.
If the claimant withdraws their provisional claim, or the claim expires, an assessment must be made to bring the tax from the initial disposal of the old asset into charge.
The decision in R & C Commrs v Benham (Specialist Cars) Limited [2017] UKUT 0389 (TCC) confirmed that this gain is correctly brought into charge by means of a discovery assessment, although S153A(4) TCGA92 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.
S153A(5) TCGA92 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 3
Joe sold his trade premises on 10 March 2019 and made a gain. He made a provisional claim for roll-over relief. The provisional claim in respect of this disposal will expire on 31 January 2023 if it has not been withdrawn or replaced with a valid claim to roll-over relief by this date.
Example 4
A company, Joe Ltd, sold premises in its accounting period ending 31 March 2019 and made a gain. The company made a provisional claim for roll-over relief. The provisional claim in respect of this disposal will expire on 31 March 2023 if it 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.
By the relevant day the normal three year reinvestment time limit in S152(3) TCGA92 will have long passed, see CG60300. Claims to relief can only be accepted in these circumstances by the exercise of the Board’s discretion, see CG60300. As that guidance explains, the Board will not exercise its discretion in advance of a reinvestment. The claimant cannot rely on the exercise of that discretion and so cannot request postponement on the basis of that discretion being exercised. You should not appear to prejudice the exercise of that discretion by agreeing to a postponement.