Taxation of Chargeable Gains Act 1992 Schedule 7C paragraph 5

The relief

Schedule 7C paragraph 5 sets out the mechanics of the rollover relief available when shares are disposed of to the trustees of an approved Share Incentive Plan and the disposal proceeds are reinvested in replacement assets.

• Where all disposal proceeds are reinvested, a claim within two years of acquiring the replacement asset allows the gain on disposal to be reduced to nil, with the base cost of the replacement asset reduced by the held-over gain
• Where only part of the disposal proceeds are reinvested, partial relief is available — the chargeable gain is reduced (but not to nil), and the base cost of the replacement asset is reduced by the same amount
• The relief only affects the claimant's tax position and does not alter the capital gains tax treatment of the other party to either the disposal or the acquisition
• Any statutory rules that fix deemed consideration for a disposal or acquisition (such as market value rules for connected party transactions) are applied first, before the rollover relief adjustments are calculated