HMRC are writing to taxpayers who included a provisional Rollover Relief claim in their 2020-2021 Self Assessment return where HMRC has no evidence of the provisional claim being updated with a valid claim. These claims expire on 31 January 2025.

Person reading a letter

Rollover Relief applies where trading assets are sold and new trading assets are purchased with the proceeds within a prescribed period. It is available for individuals and companies and enables them to defer the capital gain by rolling it over against the cost of the replacement business asset. The Capital Gains Tax (CGT) cost of the new asset is reduced by the gain.

HMRC say:

  • If a valid claim isn’t made before the deadline, HMRC will withdraw the provisional claim and the deferred CGT will become payable. 
  • Valid claims for relief should be made when new asset(s) are bought before 31 January 2025.
    • Form HS290 for 2020-2021 should be used.
  • Claims are only valid if the new assets are bought within three years of the relevant disposal.
    • Both original and replacement assets must be used for the purposes of a trade.
  • If there has been no purchase of a qualifying asset but a provisional claim has been made, and there is no intention to submit a valid claim in time, HMRC should be notified. Advising HMRC as soon as possible when a claim cannot be validated will reduce the amount of interest payable.
  • HMRC may extend the time limits where a taxpayer intends to purchase a replacement asset but has not done so by the end of the three years after disposal because of exceptional circumstances.
    • HMRC's letter refers to the conditions that must apply. Late claims will be considered on a case-by-case basis.

Useful guides on this topic

CGT: Rollover Relief: At a glance
What is Rollover Relief and when does it apply? What are the conditions?

CGT: Rollover Relief
What is Rollover Relief? When a capital gain is made on the disposal of a business asset, it is possible to defer the gain by rolling it over against the cost of acquiring a replacement business asset. What are the conditions for the relief? What is a business asset?

CGT: Reliefs, disposal of a business or its assets
Which Capital Gains Tax (CGT) reliefs apply when a person replaces or disposes of an asset used by a business, the whole or part of a business, or shares in a company?

 External source

Check your 2020 to 2021 Business Asset Rollover Relief claim