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HMRC internal manual

Capital Gains Manual

Roll-over relief: partial reinvestment


The amount of roll-over relief available is reduced if part only of the disposal proceeds are invested in new qualifying assets. Partial relief is due if the amount not so invested is less than the gain as it means that part of the gain has been used in the reinvestment. Section 153(1) provides for that part to qualify for relief.

A trader disposes of a qualifying asset for a consideration of £100,000 and at a chargeable gain of £60,000. Two years later, the trader acquires a different qualifying asset at a cost of £80,000. The amount not reinvested is £100,000 - £80,000 = £20,000 which is less than the gain. £40,000 of the gain has been reinvested. As a result, the chargeable gain assessable on disposal of the old asset is reduced to £20,000.