Budget 2014 – Capital gains business asset roll-over relief

Business asset roll-over is a well-established capital gains tax relief, which is contained in sections 152 to 159, TCGA 1992. The relief applies where an individual or a company disposes of an asset which has been used for the purposes of a trade, and the proceeds are reinvested in new assets that are brought into use for the purposes of the trade. The gain on the old asset can be rolled over into the base cost of the new asset, and is therefore deferred until the new asset is sold. This relief applies to specific assets, which are set out in section 155.

Section 155 will be amended to include acquisitions and disposals of payment entitlements under the new agricultural subsidy Basic Payment Scheme. This new subsidy replaces the Single Payment Scheme, which will cease in 2014, and which was included in Class 7A of the relevant classes of asset to which roll-over relief applies.

The measure is retrospective, and will apply in relation to acquisitions and disposals of Basic Payment Scheme payment entitlements on or after 20 December 2013, when the relevant EU Regulation came into force.

The measure ensures that farmers are not disadvantaged by changes to the European Union’s agricultural subsidy scheme.