My client is selling a commercial building which she owns and which is used by her personal trading company. She is looking to use the proceeds from the sale of the building to purchase a property which she will personally operate as a furnished holiday let. Would she be able to claim rollover relief on this?

The rules on rollover relief are set out in Taxation on Chargeable Gains Act 1992 (TCGA 1992) s152 and can be complicated. They require care and attention to ascertain whether it is available on the asset being disposed of (the ‘old’ asset) and what conditions have to be met for the replacement asset (the ‘new’ asset).

The relief operates by reducing the allowable cost of the new asset by the qualifying gain on the old asset. The relief is restricted where the proceeds are not fully reinvested in the acquisition of the new asset. Similarly, where an asset has not been used solely for the trade, the quantum of the gain that can be rolled over will be restricted as per s152(6) and s152(7).