CG60300 - Reliefs: Replacement of Business Assets (Roll-over Relief): Time limit for reinvestment
Statutory time limit
A person must acquire the new assets, or enter into an unconditional contract to acquire them, within one of the following periods:
12 months before the disposal of the old assets
36 months after disposing of the old assets
Business Asset Roll-over Relief (Self Assessment helpsheet HS290) (GOV.UK) provides an example.
Extending the time limit
If a person acquires the new assets outside the statutory time limit and then makes a claim for relief, section 152(3) TCGA 1992 gives the Board of HMRC (“the Board”) the power to exercise discretion to extend the time allowed for acquiring new assets.
If the Board agrees to extend the time limit, the reinvestment condition will be treated as met.
The Board cannot consider whether to extend the time limit before having the following:
a valid claim
evidence that the old asset has been disposed of
evidence that the new asset has been acquired (that is, reinvestment has been made)
confirmation that all other conditions for roll-over relief are met
This includes the condition that the disposal consideration has been applied in acquiring new assets (see CG60250).
The First-tier Tribunal does not have the power to overturn a Board decision not to extend the time limit.
Provisional relief
A person may obtain provisional relief before the new asset is acquired by making a declaration of intention to reinvest in their tax return (see CG60310).
If provisional relief ends before the reinvestment happens, the gain becomes chargeable to tax.
The Board’s discretion to extend the reinvestment period does not include extending the period for which provisional relief applies. They cannot use their discretion to stop a gain becoming chargeable simply because provisional relief has expired.
Conditions for extending the time limit
The Board will only consider extending the time limit after both the disposal of the old asset and the acquisition of the new asset have taken place, and when all relevant facts and documents are available.
There is further guidance on when HMRC may accept requests to extend the time limit for reinvestment at Business Asset Roll-over Relief (Self Assessment helpsheet HS290) (GOV.UK).
Compulsory purchase of land followed by a lease-back
As explained in Statement of Practice D6, if land is acquired by compulsory purchase for development and the authority immediately grants the previous owner a lease of the land until construction begins, the Board will extend the time limit for reinvestment to three years after the land stops being used for the purposes of the trade.
This extension depends on the claimant showing that they clearly intended to use the sale proceeds to acquire relevant assets.