Taxation of Chargeable Gains Act 1992, section 152

Roll-over relief

Part V Transfer of business assets , business asset disposal relief and investors' relief

(1) If the consideration which a person carrying on a trade obtains for the disposal of, or of his interest in, assets (“the old assets”) used, and used only, for the purposes of the trade throughout the period of ownership is applied by him in acquiring other assets, or an interest in other assets (“the new assets”) which on the acquisition are taken into use, and used only, for the purposes of the trade, and the old assets and new assets are within the classes of assets listed in section 155, then the person carrying on the trade shall, on making a claim as respects the consideration which has been so applied, be treated for the purposes of this Act—

(a)as if the consideration for the disposal of, or of the interest in, the old assets were (if otherwise of a greater amount or value) of such amount as would secure that on the disposal neither a gain nor a loss accrues to him, and

(b)as if the amount or value of the consideration for the acquisition of, or of the interest in, the new assets were reduced by the excess of the amount or value of the actual consideration for the disposal of, or of the interest in, the old assets over the amount of the consideration which he is treated as receiving under paragraph (a) above,

but neither paragraph (a) nor paragraph (b) above shall affect the treatment for the purposes of this Act of the other party to the transaction involving the old assets, or of the other party to the transaction involving the new assets.

(2)Where subsection (1)(a) above applies to exclude a gain which, in consequence of Schedule 2, is not all chargeable gain, the amount of the reduction to be made under subsection (1)(b) above shall be the amount of the chargeable gain, and not the whole amount of the gain.

(3)Subject to subsection (4) below, this section shall only apply if the acquisition of, or of the interest in, the new assets takes place, or an unconditional contract for the acquisition is entered into, in the period beginning 12 months before and ending 3 years after the disposal of, or of the interest in, the old assets, or at such earlier or later time as the Board may by notice allow.

(4)Where an unconditional contract for the acquisition is so entered into, this section may be applied on a provisional basis without waiting to ascertain whether the new assets, or the interest in the new assets, is acquired in pursuance of the contract, and, when that fact is ascertained, all necessary adjustments shall be made by making [F1072or amendingF1072] assessments or by repayment or discharge of tax, and shall be so made notwithstanding any limitation on the time within which assessments [F1073or amendmentsF1073] may be made.

(5)This section shall not apply unless the acquisition of, or of the interest in, the new assets was made for the purpose of their use in the trade, and not wholly or partly for the purpose of realising a gain from the disposal of, or of the interest in, the new assets.

(6)If, over the period of ownership or any substantial part of the period of ownership, part of a building or structure is, and part is not, used for the purposes of a trade, this section shall apply as if the part so used, with any land occupied for purposes ancillary to the occupation and use of that part of the building or structure, were a separate asset, and subject to any necessary apportionments of consideration for an acquisition or disposal of, or of an interest in, the building or structure and other land.

(7)If the old assets were not used for the purposes of the trade throughout the period of ownership this section shall apply as if a part of the asset representing its use for the purposes of the trade having regard to the time and extent to which it was, and was not, used for those purposes, were a separate asset which had been wholly used for the purposes of the trade, and this subsection shall apply in relation to that part subject to any necessary apportionment of consideration for an acquisition or disposal of, or of the interest in, the asset.

(8)This section shall apply in relation to a person who, either successively or at the same time, carries on 2 or more trades as if both or all of them were a single trade.

(9) In this section “period of ownership” does not include any period before 31st March 1982.

(10)The provisions of this Act fixing the amount of the consideration deemed to be given for the acquisition or disposal of assets shall be applied before this section is applied.

(11)Without prejudice to section 52(4), where consideration is given for the acquisition or disposal of assets some or part of which are assets in relation to which a claim under this section applies, and some or part of which are not, the consideration shall be apportioned in such manner as is just and reasonable.

Definitions used in section 152 12

trade

“trade” has the same meaning as in the Income Tax Acts;

Defined in s.288(1) · see it in the full Act

(2) In sections 152 to 157 and this section the expressions “trade”, “profession”, “vocation”, “office” and “employment” have the same meanings as in the Income Tax Acts, ... .

Defined in s.158(2) · see it in the full Act

(b) “trade”, “profession” and “vocation” have the same meaning as in the Income Tax Acts.

Defined in s.165(8) · see it in the full Act

(9) In this section and Schedule 7 and in determining whether a company is a trading company for the purposes of this section and that Schedule, the expression “trade” shall be taken to include the occupation of woodlands where the woodlands are managed by the occupier on a commercial basis and with a view to the realisation of profits.

Defined in s.165(9) · see it in the full Act
assets

(a) the reference to “assets” were a reference to “property”, and

Defined in Sch.4ZA para.22(2) · see it in the full Act
asset

In this sub-paragraph “asset” includes part of an asset.

Defined in Sch.8B para.6(1) · see it in the full Act
period of ownership

(7A) Paragraph (b) of the definition of “period of ownership” does not apply in a case where paragraph 8 or 14 of Schedule 4AA applies (the individual has made an election for the retrospective basis of computation to apply).

Defined in s.223(7A) · see it in the full Act
the new assets

Any shares so received by the transferor in exchange for the business are referred to below as “the new assets”.

Defined in s.162(1) · see it in the full Act
class

“class”, in relation to shares or securities, means a class of shares or securities of any one company;

Defined in s.288(1) · see it in the full Act
the Board

“the Board” means the Commissioners of Inland Revenue;

Defined in s.288(1) · see it in the full Act
notice

“notice” means notice in writing;

Defined in s.288(1) · see it in the full Act
tax

and for the purposes of this definition “tax” means capital gains tax, corporation tax or income tax.

Defined in s.16A(2) · see it in the full Act
substantial

(2) The provision made by Schedule 1A is not to be taken as affecting the meaning of “substantial” in other contexts.

Defined in s.1D(2) · see it in the full Act
building

“building” includes part of a building and references to a building may include references to land occupied therewith and used for the same purposes;

Defined in Sch.2 para.15 · see it in the full Act
land

“land” includes messuages, tenements, and hereditaments, houses and buildings of any tenure;

Defined in s.288(1) · see it in the full Act

(b) “land” includes buildings.

Defined in Sch.2 para.9(5) · see it in the full Act

Cases considering section 152 3

Mertrux Ltd v HM Revenue and Customs

[2013] EWCA Civ 821 · 9 July 2013Limits

The court treated roll-over relief as dependent on identifying the assets disposed of and the replacement assets acquired. Relief was unavailable for the contractual dealership rights, while independently existing goodwill could be treated separately and required apportionment if qualifying and non-qualifying assets were involved. (see paras [1], [18], [31], [42]) The court noted that where consideration relates to disposals of qualifying and non-qualifying assets, the consideration may be apportioned under section 152(11). (see para [18])

Barnett, R (On the Application Of) v Inland Revenue

[2003] EWHC 2581 (Admin) · 27 October 2003Interprets

The judgment distinguishes guidance concerning section 152(1) from the policy governing the Board’s discretion under section 152(3). D24 was treated in the cited authority as an explanation of statutory meaning, whereas CG60640 was an indication of discretionary practice (see para [20]). The judgment identifies the statutory conditions for roll-over relief and the Board’s power to extend the reinvestment period. Section 152(3) vests that discretion in the Board and does not confer it on the General Commissioners (see paras [3]–[4]; [20]–[21]). The Board’s discretion to extend the three-year reinvestment period is exclusive. The Board was entitled to assess whether circumstances beyond the taxpayer’s control prevented timely acquisition and to refuse an extension where the statutory and policy criteria were not met (see paras [21]–[26]).

Suzanne Elaine Procter v Philip John Procter & Ors

[2022] EWHC 1202 (Ch) · 25 May 2022

The court referred to section 152 as part of the taxation background to the structure of the 2003 WOFL transactions and the intended rollover relief. (see paras [150]-[153])

What each judgment says about section 152 is in the case-law panel in the full Act.

Amendments and notes

12 notes from legislation.gov.uk

Amendments

  1. F1072Words in s. 152(4) inserted (with effect in accordance with s. 121(8) of the amending Act) by Finance Act 1996 (c. 8), s. 141(1)(a)
  2. F1073Words in s. 152(4) inserted (with effect in accordance with s. 121(8) of the amending Act) by Finance Act 1996 (c. 8), s. 141(1)(b)

Modifications

  1. C263Ss. 152-156 modified (16.7.1992) by 1992 c. 48, s. 77, Sch. 17 paras.3, 7
  2. C264Ss. 152-160 modified (retrospective to 11.1.1994) by Finance Act 1994 (c. 9), s. 252(3), Sch. 24 para. 6(1)
  3. C265S. 152 restricted (retrospective to 11.1.1994) by Finance Act 1994 (c. 9), s. 252(3), Sch. 24 para. 6(3)
  4. C266Ss. 152-154 modified (retrospective to 11.1.1994) by Finance Act 1994 (c. 9), s. 252(3), Sch. 24 para. 6(4)
  5. C267Ss. 152-156 modified (3.5.1994) by Finance Act 1994 (c. 9), Sch. 25 para. 3(2)
  6. C268S. 152 modified (19.9.1994) by Coal industry Act 1994 (c. 21), s. 68(4), Sch. 4 para. 7(1)(a) (with Sch. 4 para. 14); S.I. 1994/2189, art. 2, Sch.
  7. C269S. 152 restricted (19.9.1994) by Coal industry Act 1994 (c. 21), s. 68(4), Sch. 4 para. 7(2)(a) (with Sch. 4 para. 14); S.I. 1994/2189, art. 2, Sch.
  8. C270S. 152 applied (with modifications) (19.9.1994) by Coal industry Act 1994 (c. 21), s. 68(4), Sch. 4 para. 7(3) (with Sch. 4 para. 14); S.I. 1994/2189, art. 2, Sch.
  9. C271Ss. 152, 153 excluded (with effect in accordance with s. 63(4) of the amending Act) by Finance Act 2000 (c. 17), Sch. 22 para. 67
  10. C272S. 152 modified (24.7.2002) by Finance Act 2002 (c. 23), Sch. 29 para. 132