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HMRC internal manual

Capital Gains Manual

Roll-over relief: partnerships: general

The effect of TCGA92/S59 (1) is to treat transactions in partnership assets as having been made by the partners rather than by the partnership. Therefore a claim for roll-over relief under TCGA92/S152 cannot be made by a partnership. However, claims can be made by a partner in a partnership but only to the extent of his partner’s interest in the old and the new assets and only to the extent that those assets are used for the purposes of a trade carried on by him (either alone or in partnership).

Each partner’s share of the disposal consideration of the old assets and costs of acquisition of the new assets must be established in order to determine the amount of relief due.

Guidance on the computation and method of charging gains which accrue on disposals of partnership assets is at CG27000.


A and B formed a partnership on 1 January 2000. On the same day, they acquired freehold trading premises at a cost, inclusive of incidental expenses, of £100,000. A and B agreed that their interests in the premises would be held in equal shares.

On 1 May 2008, the freehold premises were sold for £340,000 net of expenses of sale.

On 1 March 2009, the partnership acquired new freehold trading premises at a cost of £400,000 including incidental expenses. The partners agreed that their interests in the new premises would be held as to three-fifths by A and two-fifths by B.

The computation of relief is as follows.

      A   B
      £   £
  Disposal proceeds   170,000   170,000
LESS Cost   50,000   50,000
  CHARGEABLE GAIN   120,000   120,000
  Cost of new asset   240,000   160,000
  Proceeds re-invested 170,000   160,000  
  Amounts not re-invested     10,000  
  (i.e. chargeable gain)        
  Amounts of chargeable gain        
  deducted   120,000   110,000
  Adjusted cost of new asset   120,000   50,000

NOTE. If a taxpayer is within the charge to Capital Gains Tax, neither indexation allowance nor taper relief apply to disposals of assets on or after 6 April 2008. Previously indexation allowance had been frozen at April 1998. Companies and other concerns within the charge to Corporation Tax are not affected by these changes. For indexation allowance see CG17207+ and for taper relief see CG17895+.


Relief is available for assets used in the partnership trade which are owned not by the partnership but by an individual partner, even if rent is paid by the partnership to that partner.