Meg Saksida continues with the theme of efficient investments for capital gains tax and considers the details of rollover relief.
Rollover relief is a relief available for capital gains made on business assets sold by traders such as sole traders or partnerships and includes those in furnished holiday letting businesses. This article focuses on unincorporated businesses, but the relief is also available to companies.
The relief can also be used for sales by individuals if the business asset is being used in a company in which they have at least 5% of the voting shares. If an individual has more than one trade (e.g. if they have two sole trader businesses) they can rollover a gain on one trade to a purchase of an asset in their other trade.
What does rollover relief do?
Rollover relief, sometimes called ‘replacement of business assets’ relief, is a form of deferral for capital gains tax (CGT) purposes. Rather