Renters' Rights Act 2025, Phase 1 commencement
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England

Property Tax

Rollover Relief UK — Commercial Property and Business Asset Replacement

Business Asset Roll-Over Relief under TCGA 1992 ss.152-158 — qualifying assets, the trading requirement, why buy-to-let does not qualify, the reinvestment window, partial reinvestment, and interaction with BADR and hold-over relief.

13 min readUpdated 8 June 2026Last reviewed: 17 May 2026capital-gains-taxrollover-reliefcommercial-propertytrading

Qualifying Assets — The Asset Classes

Roll-over relief under TCGA 1992 s.152 is available on qualifying assets in Class 1 (land and buildings used only for the purposes of a qualifying trade) and Class 1A (goodwill). The asset must have been used in the qualifying trade throughout (or at the time of) disposal. Where only part of the building was used for trade, only the trading proportion qualifies. Replacing a freehold building with another freehold achieves a full roll-over (gain disappears into new base cost). Replacing a freehold with a short lease (60 years or less — a 'depreciating asset') achieves a hold-over only — the gain crystallises on the earlier of disposal, cessation of trading use, or 10 years.

  • Class 1 (land and buildings): must be used only for the purposes of a qualifying trade throughout (or at the time of) disposal
  • Partial trade use: only the trading portion of the building qualifies — the investment portion remains taxable
  • Full roll-over: freehold to freehold — gain rolled into the base cost of the replacement asset; deferred until future disposal
  • Depreciating assets (leases with 60 years or less): hold-over only — gain crystallises on disposal, cessation of trading use, or 10 years (whichever is earlier)

The Qualifying Trade Requirement — Why Buy-to-Let Does NOT Qualify

Roll-over relief requires the asset to have been used in a qualifying trade. Holding residential or commercial property as an investment (buy-to-let; collecting rent) is NOT a trade — it is an investment activity. Relief is available for hotels using their buildings; farms using their land; manufacturers using their factory; retailers using their shop; property developers who buy, develop, and sell. The FHL regime's concession treating furnished holiday lets as a trade for rollover purposes was abolished with the FHL regime from 6 April 2025.

  • Buy-to-let does NOT qualify: residential or commercial property investment (collecting rent without trading activity) is investment, not trade
  • What qualifies: hotels; farms; manufacturing (factory); retail (shop); property development (buying, developing, and selling as a trade)
  • FHL abolition (April 2025): FHL properties previously treated as trading assets; after abolition they are investments — no rollover relief on post-April 2025 disposals
  • Badges of trade: frequency; period of ownership; modifications; method of finance; purpose of acquisition determine trader vs investor status

The Reinvestment Window and How Relief Works

The replacement asset must be acquired between 12 months before and 36 months after the disposal (TCGA 1992 s.152(3)). HMRC has discretion to extend for circumstances outside the taxpayer's control (planning delays; chain failure). Full reinvestment: entire proceeds reinvested = full roll-over; no CGT on disposal; gain absorbed into lower base cost of replacement. Partial reinvestment: the amount NOT reinvested is taxable immediately; the remainder rolls over. The election must be made within 4 years of the end of the relevant tax year.

  • Reinvestment window: 12 months before to 36 months after disposal; HMRC discretion to extend for exceptional circumstances
  • Full reinvestment: zero CGT on disposal; gain rolled into base cost of new asset
  • Partial reinvestment: the uninvested portion is taxable immediately; the remainder rolls over into new asset base cost
  • Election required: must elect within 4 years of the end of the relevant tax year; not automatic

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