188体育

TCGA92/S153 extends the availability of roll-over relief to claimants who have only reinvested part of the proceeds from the sale of a qualifying asset.

Partial relief is due if the amount retained is less than the gain as it means that part of the gain has been used in the reinvestment. Under TCGA92/S153(1) the part that has been reinvested will qualify for relief. In essence, the amount charged to tax will be the lower of:

• the chargeable gain arising from the disposal of the old asset

and

• the amount of proceeds from the disposal of the old asset not applied in acquiring new assets

Example 1 鈥� Insufficient Reinvestment

Chas sells the premises used in his trade for 拢500,000, realising a chargeable gain of 拢250,000. Within a year, he acquires new premises for 拢200,000. As Chas has therefore retained 拢300,000 from the sale of the old premises and this amount exceeds the chargeable gain, no relief will be available. If no further qualifying reinvestment is made, Chas will have to pay Capital Gains Tax on the full 拢250,000 gain arising from the sale of the old premises.

Example 2 鈥� Partial Reinvestment

Suppose instead that Chas acquired new premises worth 拢300,000. As above, the amount charged to tax will be the lower of:

• the chargeable gain arising from the disposal of the old asset 鈥� here 拢250,000

and

• the amount of proceeds from the disposal of the old asset not applied in acquiring new assets 鈥� here 拢200,000

As a result, Chas will secure roll-over relief of 拢50,000, reducing both the chargeable gain arising on the disposal of the old premises (to 拢200,000) and the base cost of the new premises (to 拢250,000) to use going forward as and when they are sold.