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HMRC internal manual

Capital Gains Manual

Roll-over relief: depreciating assets: definition

TCGA92/S154 (2) & (7)

A depreciating asset is defined as a wasting asset under TCGA92/S44, see CG76700, or an asset with a maximum life of 60 years. That is, an asset which will become a wasting asset within 10 years of the relevant time.

Where the new assets are depreciating assets, the chargeable gain on disposal of the old assets is not deducted from the cost of the new assets. Instead, that gain is held over and is to be assessed on occurrence of the first of the following events:-

  • the claimant disposes of the new asset,
  • the claimant ceases to use the new asset for the purposes of his trade. ESC/D45 states the cessation of use of an asset caused by the death of the claimant is not treated as an occasion of charge,
  • 10 years have elapsed since the date of acquisition of the new asset.

For groups of companies see CG45945.