Any CGT breaks for changing premises?

summereire

Hi, when a business is relocated from one area to another (due to problems with footfall) and the building is sold and another one purchased immediately are there any breaks on CGT? The first property was purchased in the late 70s so clearly is now worth a lot more on paper and if a third of it disappears on tax that leaves a lot less money to acquire the new property and there is no real gain as we wouldn't be cashing out. We would of course consult a tax advisor, just a hypothetical to understand the options for now.

Thanks

CIARAN_BOYLE

summereire wrote: »

Hi, when a business is relocated from one area to another (due to problems with footfall) and the building is sold and another one purchased immediately are there any breaks on CGT? The first property was purchased in the late 70s so clearly is now worth a lot more on paper and if a third of it disappears on tax that leaves a lot less money to acquire the new property and there is no real gain as we wouldn't be cashing out. We would of course consult a tax advisor, just a hypothetical to understand the options for now.

Thanks

I believe that there is. The CGT doesn't go away but rather gets rolled forward.

summereire

Great, if you know of any keywords or citations that would be much appreciated.

This seems to be the UK version of the same thing: https://www.gov.uk/business-asset-rollover-relief

CIARAN_BOYLE

summereire wrote: »

Great, if you know of any keywords or citations that would be much appreciated.

This seems to be the UK version of the same thing: https://www.gov.uk/business-asset-rollover-relief

my apologies it appears to have discontinued some time ago. If you disposed before the cut off point you can continue to carry forward these gains through future disposals.

summereire

Thanks, yes that would explain why I'm having difficulty finding anything! Appreciate any posts if there is word of something like this or similar.

dogsears

You should seek professional advice, especially as it appears the value is now quite high. Note also that a property purchased in the 70's would attract a high indexation allowance i.e. a factor you multiply the original cost by in order to arrive at the deductible cost (a building purchased in 1974 would have an indexation allowance of about 7.5 so for every 1,000 of actual cost, there would be a deductible of c7,500). CGT would only apply to the gain in excess over that.

summereire

Thanks. Yes we will seek advice, just doing my research first, though so far it's not looking too good. Particularly annoying that they seem to have exactly this scheme in the UK and it does seem to make sense not to because there is no gain as such, just a transfer of assets of equivalent value for business purposes. Yes the indexation will help, though with the level of increase of property between now and the 70s even a 7.5 multiplier is only a small fraction of current market value.

dogsears wrote: »

You should seek professional advice, especially as it appears the value is now quite high. Note also that a property purchased in the 70's would attract a high indexation allowance i.e. a factor you multiply the original cost by in order to arrive at the deductible cost (a building purchased in 1974 would have an indexation allowance of about 7.5 so for every 1,000 of actual cost, there would be a deductible of c7,500). CGT would only apply to the gain in excess over that.