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What is the difference between rollover and heldover relief(not gift relief)?
I find it the sameDo you mean the difference in what they are, or difference in calculations? I find them quite similar, but with some subtle differences.
Firstly, rollover relief is relief relating to buying new business assets, whereas holdover relief is relief for making gifts.
Regarding calculations, the proceeds (I think) are always written down at their market value. For rollover this is the actual value received, whereas for holdover the market value may be higher than the actual value received.
When it comes to calculating actual gain after relief, for rollover it’s proceeds minus amount invested in new asset. For holdover, it’s actual proceeds received minus costs. In either case the deferred gain is the balancing figure.
I hope I’ve got this right, because I’m still learning all this myself.
Hi there
As name suggest, rollover relief is a relief to defer the capital gain. This is done by reducing the gain from the base cost of new asset purchased. While you do calculation you have reduce the cost of new asset by the gain to get the new tax base cost which would be used in future capital gain calculation.
However, Holdover relief is something which is not deducted from the base cost of asset, however it is tracked separately and if new asset is sold within 10 years then along with gain on new asset, holded gain would also be chargeable.
If a new asset is not sold within 10 years this holdover relief get chargeable automatically.Hope it helps
RajYour second paragraph Raj sounds to me like you are describing rollover relief applying to depreciating assets (such as leasehold properties). That’s according to my BPP book, which from past experience, can’t completely be relied on! I’d like to know the answer for sure, as I’m doing the exam on Tuesday!
I just had a quick look at the open tuition course notes, and I could be wrong, but it doesn’t appear to mention that chattels do not qualify for rollover relief (apart from, according to HMRC, ships, aircraft, hovercraft, satellites, space stations and spacecraft!).
Also, i couldn’t see the word “holdover” in the course notes, but it does use the words “gift relief”, which I took to mean the same thing. Maybe someone could clarify that in case I have got it wrong.
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