Business Asset Rollover Relief lets traders defer Capital Gains Tax when they sell a business asset and plough the money back into the business. The gain is not wiped out — it is deferred until the replacement asset is sold. Here is how it works and who can use it in 2026/27.
What Rollover Relief Does
When you sell a qualifying business asset at a gain, you normally owe CGT. Rollover relief allows you to postpone that tax by reducing the base cost of the replacement asset by the amount of the deferred gain.
In simple terms:
- You sell Asset A for a £60,000 gain
- You buy Asset B within the qualifying window
- Asset B’s base cost is reduced by £60,000
- No CGT due now — the tax is deferred until you sell Asset B
If you later sell Asset B without rolling over again, the original £60,000 gain (plus any new gain on Asset B) becomes chargeable.
Key Figures 2026/27
| Amount / Rate | |
|---|---|
| CGT annual exempt amount | £3,000 |
| CGT rate — basic rate taxpayer (non-residential) | 18% |
| CGT rate — higher/additional rate (non-residential) | 24% |
| CGT rate — residential property | 18% / 24% |
| Rollover reinvestment window | 1 year before to 3 years after disposal |
| Partial reinvestment: immediately chargeable portion | Sale proceeds minus amount reinvested |
Qualifying Assets for Rollover Relief
| Asset | Qualifies? | Notes |
|---|---|---|
| Land and buildings used in a trade | Yes | Must be occupied and used in trade |
| Fixed plant and machinery | Yes | Fixed only — not moveable equipment |
| Goodwill | Yes (limited) | Only on disposal before April 2002 for individuals; still relevant for companies |
| Milk / potato quotas | Yes | Agricultural businesses |
| Fish quotas | Yes | Commercial fishing operations |
| Let property / investment property | No | Must be actively used in trade |
| Shares | No | Not a qualifying asset |
| Moveable plant and machinery | No | Must be fixed to premises |
Worked Example: Farm Building Replacement
Robert runs a farming business. He sells a barn used in the trade for £320,000. His original cost was £180,000. He buys a replacement grain store for £340,000 within two years.
Without rollover relief:
- Gain: £320,000 − £180,000 = £140,000
- Less annual exempt amount: −£3,000
- Taxable gain: £137,000
- CGT at 24% (higher rate): £32,880
With rollover relief (full reinvestment):
- Sale proceeds: £320,000
- Reinvested: £340,000 (exceeds proceeds — full gain deferred)
- Deferred gain: £140,000
- Base cost of grain store: £340,000 − £140,000 = £200,000
- CGT now: £0
When Robert later sells the grain store, his base cost is £200,000 — the deferred £140,000 gain is built into the calculation at that point.
Partial Reinvestment
If Robert had only purchased a replacement asset costing £280,000 (less than the £320,000 proceeds):
- Shortfall: £320,000 − £280,000 = £40,000 immediately chargeable
- Remaining gain deferred: £140,000 − £40,000 = £100,000 rolled over
- Base cost of replacement: £280,000 − £100,000 = £180,000
You pay CGT now only on the shortfall, and defer the rest.
How to Claim Rollover Relief
Rollover relief is claimed on your Self Assessment return (SA108 Capital Gains pages). You must make the claim within four years of the end of the tax year in which the gain arose.
If you have sold an asset but have not yet purchased the replacement:
- Report the disposal on your SA return
- Claim provisional rollover relief — noting that a replacement is intended
- When the replacement is purchased, amend your return
HMRC will accept a provisional claim and will not collect the deferred tax while the claim is pending, provided the purchase completes within the qualifying window.
Rollover Relief vs Business Asset Disposal Relief
These are separate reliefs that can sometimes be used together:
| Relief | What it does | Rate |
|---|---|---|
| Business Asset Rollover Relief | Defers the gain to replacement asset | Gain taxed later at prevailing rate |
| Business Asset Disposal Relief | Reduces CGT rate on qualifying disposals | 10% on qualifying gains |
If you use rollover relief and later sell the replacement asset in a way that qualifies for Business Asset Disposal Relief, the 10% rate may apply to the deferred gain at that point. The interaction between the two reliefs requires careful planning.
Key Conditions Summary
For a successful rollover claim:
- Both the asset sold and the replacement must be qualifying assets used in your trade
- The replacement must be purchased between one year before and three years after the disposal
- You must reinvest at least the sale proceeds to defer the full gain
- The assets must be used in a trade — investment use disqualifies the relief
- The claim must be made within 4 years of the end of the tax year of the disposal
See our Capital Gains Tax guide, CGT on inherited property, and Business Asset Disposal Relief guide.