On 1 October 2015 Smooth ltd sold a factory for £860000 realising a gain of £250000
On 1 November 2014 the company had purchased an immovable machine for £900000
The machine is expected to be used by the company for at least 25 years.
The company prepares accounts to 31 December
The company wishes to defer the gain arising on the sale of the factory by making a rollover relief election in respect of the acquisition of the machine
reply by true or false
the £250000 gain which could be deferred as a result of the acquisition of the machine will become chargeable on 1 October 2015
the company must make a rollover relief by 31 December 2019
Ask the Tutor ACCA TX-UK
explanation
The claim for relief must indeed be made within 4 years of the end of the accounting period of disposal but the gain does not become chargeable on 1 October 2015 - there would be no deferral using that date!
See OT course notes page 127 chapter 21 section 2 Depreciating assets.
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