Property Tax Question – CGT roll-over relief

Property Tax Question – CGT roll-over relief

21:25 PM, 1st November 2012, About 11 years ago 4

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I have just received a property tax question from a lady called Barbara which I’m not sure of the answer. Therefore, I am publishing her email as an article to seek the opinion of other readers. I have also invited my accountants to comment too as I suspect there may be a way for Barbara and her husband to achieve CGT roll-over relief by creating a limited company for the purpose of property development (refurbishment and sell on) given their slightly unusual circumstances.

Barbara’s question relates to CGT roll-over relief and reads as follows:-

Dear Mark

Having just read your article about roll over relief not being available  on the sale of BTL properties.I was wondering if the purchase of buy-to-let properties are eligible for roll over relief after the sale of a business property ?.

Hubby and I are close to retirement  and have a business property to sell with a residential element (our main residence).

As I see it we have the choice of either paying CGT or ER  or rolling over the proceeds of the non residential part of the property. Could proceeds be rolled over into BTL or property for refurb/sale. Presumably any profit from the latter would need to be ‘rolled over’ again or would personal allowances and income tax kick in here ?

Many thanks


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Neil Barlow FCCA ATT

10:57 AM, 2nd November 2012, About 11 years ago

Where there is a chargeable gain on the disposal of a qualifying business asset and the proceeds are matched by the acquisition of another qualifying business asset within the period commencing one year before and ending three years after the disposal, a claim may be made for the gain to be deferred by claiming rollover relief. The CGT base cost of the replacement asset is reduced by the original gain and therefore as you suggest the proceeds on a second sale would need to be rolled over again to avoid CGT.

As previously mentioned by Mark, unfortunately buy to let properties do not qualify as business assets. However, if the proceeds from the sale of a qualifying business property are reinvested into say shares in a trading company or land to be used by a property development partnership, then rollover relief may be claimed.

You may wish to consider EIS or Seed EIS investments. The gain on the sale of any asset (including buy to let properties) can be deferred into a qualifying EIS or Seed EIS investment.
Alternatively, you may wish to consider paying the tax. The 10% rate of CGT currently available when claiming ER is a low rate of tax which may or may not be available in the future.

This is a complicated topic and you should seek professional taxation advice.


Mark Alexander - Founder of Property118

14:06 PM, 2nd November 2012, About 11 years ago

Hi Neil, as I thought but you put it far better than me and you are qualified to do so. Thanks.

Note to Barbara - Neil is my accountant.

Dee Mc

17:42 PM, 7th November 2012, About 11 years ago

I was wondering if there was a way to search the site. It's just that sometimes I read an article but it may not be relevant at the time. Later something comes up and I remember there was something about it on the website and just wish there was a way I could search for it.

Mark Alexander - Founder of Property118

19:45 PM, 7th November 2012, About 11 years ago

Yes, there is a search bar on the Home Page and also on the Latest Articles page. If you can vaguely recall the topic of the article simply type that in and you should then be able to find it.

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