Business Asset Roll-over relief for residential BTL?

by Readers Question

11:22 AM, 13th April 2021
About a month ago

Business Asset Roll-over relief for residential BTL?

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Business Asset Roll-over relief for residential BTL?

Hi I am selling a property mainly due to the financial consequences of covid and like so many landlords we are classed as an ‘excluded’ group by the Gov’t so just have to take the financial hit. The property was my first investment property which I have improved significantly and let for over 10 yrs so there will be a CGT liability. Not massive but still more cash to the Gov’t that at the moment I need.

I had a look at CGT reliefs and I am wondering if residential property to let qualifies for Business Asset Roll-over relief. This would require reinvestment in the same type of asset within 3 years which would be quite feasible for me.
Information online often talks about agricultural businesses and residential property doesn’t appear to be specifically mentioned.

So if anyone has some knowledge, experience of just signposting to information that would be great.

Probably the best bit of online information I found is outlined below –
You can claim the relief if:
you are trading (including companies)
you are carrying on a business of furnished holiday lettings
you are occupying commercial woodlands and managing them commercially to make a profit
you are carrying on a profession, vocation, office or employment
you are providing an asset to your personal company (i.e. you are able to exercise 5% or more of the voting rights) which has been used in it’s trade
you have disposed of land by a compulsory purchase
Traders
If you are a trader you can claim relief if you use the old and new assets in:
the same trade; or
another trade that you carry on at the same time or shortly after you have ceased the first trade.
A claim can still be made if there is a gap of three years or less between one trade ending and another beginning.

​Qualifying assets – Both the old assets and the new assets must be:
interests in buildings or parts of buildings
interests in land
fixed plant or machinery
ships, aircraft, hovercraft, satellites, space stations and spacecraft
milk, potato or ewe and suckler cow premium quotas
fish quotas

Many thanks

Adrian

Comments

Janet Carnochan

19:47 PM, 13th April 2021
About a month ago

Years ago I came out of farming and sold the land I owned. I reinvested in residential BTL's. However I was made to pay the capital gains tax ( didn't get relief ) as my accountant informed me that BTL's are an investment, not a business so therefore I wasn't eligible. I am no expert but this was the advise I was given 10 years ago.

Puzzler

9:57 AM, 14th April 2021
About a month ago

No you can't as there is no trade involved. Like Janet I sold a business (guest house) and could not use BARR on rental property. I hadn't made a gain for CGT but I thought it would have affected IHT. Note it is only a deferral anyway not an exemption. So you would still have to pay it eventually.

richard fuller

14:12 PM, 14th April 2021
About a month ago

if you are sole trader,no such thing as rollover relief,i was told buy many people and had problem,

Graham Bowcock

16:08 PM, 17th April 2021
About a month ago

Rollover relief is available for sole traders or partnerships, but it's not available in respect of residential property.

Navro18@gmail.Com

9:58 AM, 19th April 2021
About 4 weeks ago

Reply to the comment left by Graham Bowcock at 17/04/2021 - 16:08
Hi Graham, do you know whether, if I am incorporating and eligible for cgt relief under section 162, it's because I am a trading business, and in that case does it not mean the business should qualify for bpr?

Graham Bowcock

10:11 AM, 19th April 2021
About 4 weeks ago

Sorry Navro18 - no idea. I'm not an accountant.

Navro18@gmail.Com

10:18 AM, 21st April 2021
About 4 weeks ago

Reply to the comment left by Graham Bowcock at 19/04/2021 - 10:11
Ok thanks Graham


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