Statement of Practice 8 (1981)
Published 18 September 1981
© Crown copyright 1981
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1. Where a trader ceases carrying on his trade and commences carrying on another trade, there will often be an interval between these events. In such cases, the Commissioners for HM Revenue and Customs (HMRC) are prepared to regard the trades as having been carried on ‘successively’ within the meaning of TCGA 1992 s 152(8) (CGTA 1979 s 115(7)), provided that this interval does not exceed 3 years.
2. If the assets on which the gains accrue are disposed of during this interval, relief under s 152 will nevertheless be available, adjusted as necessary under subsection (7). If the new assets are acquired during the interval, the Commissioners for HMRC are prepared to allow the gain to be rolled over into them provided that they are not used or leased for any purpose in the period before the new trade commences and are taken into use for the purposes of the trade on its commencement.
3. In relation to a group of companies, TCGA 1992 s 175(1) (ICTA 1970 s 276(1)), treats all of the trades of the members of the group as a single trade for the purposes of the relief. FA 1995 s 48 extends TCGA 1992 s 175 to permit the relief to be claimed provided that the relevant conditions are satisfied, where 1 member of the group makes the disposal and another member makes the acquisition. Where the assets on which the gains accrue are disposed of after the first company has ceased to trade, or where the new assets are acquired before the second company has commenced to trade, the treatment in paragraph 2 above, will apply.
4. Nothing in this statement overrides the requirement in s 152(3) for the acquisition to take place in the period beginning 12 months before and ending 3 years after the disposal (unless the Commissioners for HMRC by notice in writing extend these time limits).
5. This practice will be applied to all cases in which the amount of the relief has not been finally settled by the date of this statement (18 September 1981). (But see Inland Revenue Press Release of 1 September 1992 on Rollover Relief and Groups of Companies.)
Notes
TCGA 1992 s 175 has been amended by FA 1995 s 48.