Taxes Consolidation Act 1997 section 597

Replacement of business and other assets

Section 597 provided rollover relief allowing a person carrying on a trade to defer capital gains tax on the disposal, before 4 December 2002, of certain business assets where the proceeds were reinvested in qualifying replacement assets used exclusively in the trade.

• Where the full disposal proceeds of qualifying business assets (plant and machinery, trade land and buildings, or goodwill) were reinvested in replacement qualifying assets before 4 December 2002, the chargeable gain was deferred until the replacement assets ceased to be used for trade purposes, and could continue to be rolled over through successive reinvestments.
• If part of the proceeds was not reinvested, but the amount not reinvested was less than the gain, the gain was reduced to the amount not reinvested and the balance was deferred; if the amount not reinvested exceeded the gain, no deferral was available.
• The replacement assets had to be acquired (or an unconditional contract entered into) within the period beginning 12 months before and ending 3 years after the disposal of the old assets, and had to be acquired for genuine trade use rather than for resale at a profit.
• The relief extended beyond trades to professions, offices, employments, farming, commercial forestry, public authorities, non-profit trade bodies, charitable bodies, and amateur sports bodies, and special rules applied where a trader carried on two or more similar trades or ceased one trade and commenced a new one within two years.