Where the owner of land is obliged to sell because an Authority exercises a statutory power to require the sale, the owner may claim a special form of Rollover Relief on any gain which arises, provided the proceeds (not just the gain) are reinvested in other land.  Neither the land disposed of, nor its replacement, needs to have been/be used for a trade or any particular purpose.

The special Rollover Relief can be claimed by individuals, trustees and companies. The owner (including sitting tenants) must make the claim in writing within four years, following the end of the tax year to which the sale relates. The time limits for reinvestment are the same as the normal Rollover Relief, which is 12 months before and 36 months after the sale.

Points to bear in mind:

  • You cannot roll over into your Principal Private Residence (PPR) or into land which becomes your PPR within six years of you acquiring the land. If you do, the Rollover is undone.
  • Land is defined as an interest or right over freehold and leasehold land and includes buildings on the land which were already there when you acquired the land. Buildings subsequently constructed do not qualify.
  • For the relief to apply, the land must be acquired by an Authority exercising its Statutory Powers.
  • The owner must not have taken any steps, by advertising to dispose of the land or made his/her willingness to dispose of it known to the Authority.
  • The consideration (proceeds) must be applied by the landowner when acquiring new land.
  • The tax legislation makes no reference to “territory”; meaning this would apply to the UK and EU, however, if your reinvestment ambitions extend beyond the EU, you should seek an advanced non-statutory clearance from HMRC, just to play safe.

If you become the subject of a Compulsory Purchase, our experts at Campbell Dallas can advise on your eligibility for Rollover Relief.

For more information contact:

Ian Williams

Partner

01224 623 111 | 01738 441 888

ian.williams@campbelldallas.co.uk

The information in this blog should not be regarded as financial advice.  This is based on our understanding in September 2018. Laws and tax rules may change in the future.