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C3.304 Rollover relief—expenditure on replacement assets qualifying for relief

As outlined in C3.301 rollover relief is available where the whole or part of the proceeds of the disposal of an asset used for the purposes of a trade are reinvested in the acquisition of other replacement assets (new assets) to be used for the same trade. It is generally accepted that it is the disposal consideration net of incidental costs of disposal that is to be compared with the total costs of acquisition including incidental costs of acquisition¹. It is not necessary to establish a link between the actual disposal proceeds and their application on the acquisition of other assets. It is sufficient that the appropriate amounts are matched.

The proceeds of a single disposal can be matched with the acquisition of several qualifying replacement assets (and likewise the proceeds of several disposals can be matched with a single qualifying replacement asset).

Although the legislation refers to new assets, expenditure on second-hand replacement assets also qualifies.

The following commentary discusses