Rollover relief is always worth considering following the disposal of farmland or indeed other business assets and decisions can be made on an individual basis. The following is a summary of some of the key points to be aware of.
You can claim relief very broadly if (amongst other things):
- You are trading.
- 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.
- You are providing a trading asset to your personal company being any company in which you can exercise 5% or more of the voting rights.
- You can claim relief if you dispose of assets that you have provided for your personal company and that have been used in its trade. The new assets you acquire must also be provided to be used in the trade of that personal company.
Both the old assets you have disposed of and the new ones you’ve acquired must be (amongst other things):
- interests in buildings or parts of buildings
- interests in land
- fixed plant or machinery
- payment entitlements under the single payment scheme or basic payment scheme
Land and buildings must be occupied and used only for your trade if you wish to claim relief. If the land or buildings have been provided by you for use by your personal company, that company must occupy and use them.
You can only claim partial relief if:
- the old assets have only been used in your trade for part of the time you’ve owned them.
- only part of a building or structure comprising either the old or the new assets has been used, or will be used, in your trade.
- if you acquire new assets for less than the amount you got on the disposal of the old assets.
You must also acquire the new assets, or enter into an unconditional contract for the acquisition of the new assets, in the 12 months before, or 36 months after the disposal of the old assets.
Relief for assets with an expected useful life of less than 60 years (depreciating assets) is only temporary and the gain will chargeable on the earlier of the disposal of the asset, ceasing to use the asset in your trade and 10 years from acquisition.
And finally… It may be possible to make a provisional claim if you intend to invest in new qualifying assets so all is not lost if you have not yet reinvested.
For more information give us a call.