when part or whole of business asset(qualifying asset) is sold and a new asset(qualifying) is acquired,which relief would be available first?
is it the rollover relief or entrepreneurs relief?
Ask the Tutor ACCA TX-UK
roll over relief
Rollover relief. Entrepreneurs relief is always the last to apply as it of course is actually a tax rate not a reduction in a gain.
Thank you.
so when the newly acquired asset is sold (given that the proceeds are not rolled over again) how will the entrepreneurs relief be applied?
is it applied only on the original assets gain? or with the new assets gain as well?
You must firstly determine that the sale is actually eligible for entrepreneurs relief (ER).
If a trader is simply selling a property used in his trade then ER is NOT available.For ER to be available the taxpayer must be selling the trade not just an asset used in the trade. If therefore the building was now being sold along with the trade the gain now arising on the property will be eligible for ER. That gain will be the sale proceeds less the allowable cost (this will be the figure reduced by the earlier rollover relief).
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