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HMRC internal manual

Capital Gains Manual

Roll-over relief: extension of time limit: compulsory acquisition: SP D6


New Town Corporations and similar authorities may purchase land for development long before the work begins. In the interval, the land may be leased or licensed back to the previous owner. In that situation, the Board will be prepared, so long as there is clear continuing intention that the sale proceeds will be used to acquire new qualifying assets, to extend the time limit for reinvesting the sale proceeds to a date three years after the land ceased to be used by the trader for his trade.

The purpose of this practice is to remove any uncertainty about the availability of roll-over relief which may be impeding the work of New Town Corporations etc in securing land at an early stage, preferably before land speculators can move in.

A relevant Grade 7 technician may also tell the taxpayer or agent, in a case within SP/D6, that no assessment will be made on the gain accruing on the disposal of the land to the authority until shortly before the time limit for assessment expires, provided that the intention to reinvest the disposal proceeds in assets qualifying for Section 152 relief clearly remains. The taxpayer or agent should be told that evidence will be required, on the lines indicated in the next paragraph, of continuing intention to reinvest.

Evidence of continuing intention to reinvest the disposal proceeds in new qualifying assets within three years after the land ceases to be used for trade purposes by the claimant should include:-

  • an annual affirmation from the taxpayer or agent that such is the intention;


  • an assurance that the disposal proceeds remain available (though not necessarily in a completely liquid form) for the purchase of new assets. Temporary investment of the funds even in equities or real property, should not of itself be taken as making the proceeds unavailable.

In such cases, the relevant Grade 7 technician may (without submission to Capital Gains Technical Group) authorise the allowance of relief under Section 152 on the acquisition of new qualifying assets within three years of the end of the use and occupation of the old land etc for trading purposes by the trader.

An assessment should be made on the gain on disposal on the earliest of the following occasions:

  • as soon as the condition of intention to reinvest in qualifying assets ceases to be satisfied;
  • when the land ceases to be used for the trade of the claimant, including on death of the trader or complete cessation of the trade;
  • in good time before the expiry of the six year time limit for assessment.