Taxation of Chargeable Gains Act 1992 section 247

Roll-over relief on compulsory acquisition

Section 247 provides a roll-over relief that allows a landowner whose land is compulsorily acquired to defer a capital gain by reinvesting the proceeds in replacement land, provided the landowner did not actively seek to sell the land.

• Where land is compulsorily acquired and the landowner did not advertise or otherwise seek to dispose of it, the gain can be deferred if the proceeds are reinvested in replacement land that is not excluded under section 248
• If all the proceeds are reinvested, the landowner can claim full roll-over relief so that no gain or loss arises on the disposal, with the base cost of the new land reduced by the deferred gain
• If only part of the proceeds are reinvested, partial relief is available provided the amount not reinvested is less than the total gain — the chargeable gain is then reduced to the amount of the proceeds not reinvested, and the base cost of the new land is reduced accordingly
• The relief extends to groups of companies, so that one group member can dispose of the old land and another group member can acquire the replacement land, although land transferred between group companies at no gain/no loss cannot qualify as replacement land