Chapter CG60300
| Published date | 12 March 2016 |
| Record Number | CG60300 |
Specified Time Limits
Unconditional Contracts
Impact of Compulsory Acquisition on Time Limits – SP D6
Board’s Discretion
Mandatory Referrals to CG Technical
Specified Time Limits
The general rule under TCGA92/S152(3) is that the new asset must be acquired, or an unconditional contract for the acquisition of new assets must be entered into, in the period beginning twelve months prior to and ending three years after the date of disposal of the old asset.
The Board of HMRC have the power to extend these time limits and the approach taken in exercising this discretion is set out below.
Unconditional Contracts
TCGA92/S152 (4) provides for relief to be allowed on a provisional basis when an unconditional contract for the acquisition of qualifying new assets is entered into. Provisional relief should be reviewed in the light of the full facts (for example the use to which the asset is put on the acquisition). All necessary adjustments by making or amending assessments or by repayment or discharge of tax may then be made without regard to normal time limits.
In addition to provisional relief when there has been an unconditional contract you should be aware of the possibility of provisional relief before any contract for acquisition has been entered into, see CG60310.
Impact of Compulsory Acquisition on Time Limits – SP D6
New Town Corporations and similar authorities may purchase land for development long before the work begins. In the interval, the land may be leased or licensed back to the previous owner. In that situation, the Board will be prepared, so long as there is clear continuing intention that the sale proceeds will be used to acquire new qualifying assets, to extend the time limit for reinvesting the sale proceeds to a date three years after the land ceased to be used by the trader for his trade.
Note though that an assessment should be made on the gain on disposal on the earliest of the following occasions:
- as soon as the condition of intention to reinvest in qualifying assets ceases to be satisfied
- when the land ceases to be used for the trade of the claimant, including on death of the trader or complete cessation of the trade
- in good time before the expiry of the relevant assessing time limit
Board’s Discretion
It is important to note that an extension cannot be granted in advance of the old asset being disposed of, the new asset being acquired and all other conditions of the relief being satisfied. The Board has no discretion to extend...
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