Q. My company is selling some fixed assets that are used for the trade. Due to downscaling, we need to purchase some new equipment. Around half of the sales proceeds will be used to fund this. Is there a way to put off the corporation tax charge on any gain?
A: Gains on fixed assets are most likely to arise on trading premises, rather than plant and machinery. Where a gain arises, the company can look to claim rollover relief, or partial relief, where some or all the proceeds are used to purchase replacement assets. The new assets do not need to be of the same type as the old assets, so for example you could sell a building and use the proceeds to purchase new plant and machinery. To qualify, the new assets must be purchased in the period starting one year before and ending three years following of the date of disposal of the old assets. As you are only going to be using half the proceeds, you will be looking at a partial relief claim. HMRC's Helpsheet 290 contains guidance on how to calculate this once you know the figures.
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