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HMRC internal manual

Capital Gains Manual

Roll-over relief: options over land in the UK

Roll-over relief is available on a disposal of an interest in a qualifying asset.

In law, the grant of an option over land in the UK creates, in the hands of the grantee, an immediate equitable interest in the land. Accordingly, the grant of an option over land in the UK is a disposal of an interest in that land. If the land is a qualifying asset, a claim to roll-over relief is available in respect of the gain accruing on the grant of the option.

This analysis is not affected by the regime in Section 144 which provides special computational rules for dealing with options.

The grant of options over other qualifying assets may also represent the disposal of an interest in those assets. The issue turns on a point of contract law and depends upon the nature of the asset. Where the asset over which the option has been granted is not an interest in land in the UK, the availability of roll-over relief should not be conceded without prior reference to Capital Gains Technical Group. A full description of the asset and a copy of the option agreement will be required in your submission (see the Capital Gains Manual Technical Help pages on how to make a submission). An instant decision cannot be given over the telephone.