Taxation (UK) · The effect of a group corporate structure for corporation tax purposes

Group Rollover Relief for ACCA TX-UK

Updated 11 October 2026 · Fact-checked

Group rollover relief treats all members of a chargeable gains group as one unit. If one company sells a qualifying business asset and any group member buys a replacement within the time window, the gain can be deferred. The deferred gain reduces the replacement's base cost. Any proceeds not reinvested are taxed now.

Understand Rollover Relief for Groups

Normal rollover relief lets a business defer a gain when it sells a qualifying business asset and spends the proceeds on a replacement. The tax is not cancelled. It is pushed back by reducing the base cost of the new asset.

Within a group, one company often sells while another company buys. Without special rules, the seller would have no replacement and the buyer would have no gain to defer. For rollover relief, the members of a chargeable gains group are treated as a single taxpayer. A chargeable gains group is a principal company and its 75% subsidiaries, plus indirect 75% subsidiaries where the principal company has an effective interest of more than 50% in them.

So company A can sell a warehouse and company B can buy a new factory. The claim works as if one company did both. The gain is deferred against B's new asset.

The usual conditions still apply. Both assets must be qualifying assets (for companies in TX: land and buildings, and fixed plant and machinery). Each asset must be used in the trade of a group member. The replacement must be bought within the window from 12 months before to 36 months after the disposal. If you do not reinvest all the proceeds, part of the gain is taxed straight away.

Key rules to remember

Reinvestment window: 12 months before the disposal to 36 months after the disposal; The replacement can be bought by any member of the same group, as long as the group conditions are met.
Full relief: If proceeds reinvested ≥ proceeds received, the whole gain is deferred; Base cost of replacement = cost of replacement − deferred gain.
Partial reinvestment: Gain taxed now = lower of (gain) and (proceeds − amount reinvested); Deferred gain = total gain − gain taxed now.
Base cost of replacement: Cost of replacement − gain deferred; This is how the deferred tax is eventually collected on a later sale.
Depreciating assets: Gain is held over until the earliest of: disposal of the replacement, it ceasing to be used in the trade, or 10 years from acquisition; A depreciating asset is one with an expected life of 60 years or less, such as fixed plant and machinery. The held-over gain is not deducted from the base cost. The gain is deferred until the earliest of the three events.
Claim time limit: The claim must be made within 4 years of the end of the accounting period of the disposal or, if later, of the acquisition; A claim made after this date is invalid, so state the deadline in a written answer.

How to solve Rollover Relief for Groups questions

Use this order for any group rollover relief question. It stops you missing a condition and keeps the numbers clean.

1Confirm the companies are in a chargeable gains group at the relevant times. That means the principal company and its 75% subsidiaries, plus indirect 75% subsidiaries where the principal company has an effective interest of more than 50%. If not, treat them as separate companies.
2Check both assets are qualifying assets (land and buildings, or fixed plant and machinery) and are used in the trade of a group member.
3Compute the gain on the old asset: proceeds − cost (and any allowable costs). Use the figures given.
4Check the replacement was bought within 12 months before to 36 months after the disposal, by any group member.
5Compare proceeds with the amount reinvested. If all proceeds are reinvested, defer the whole gain. Otherwise tax the lower of the gain and the proceeds not reinvested.
6Deduct the deferred gain from the replacement's cost to get its new base cost.
7If the replacement is a depreciating asset (expected life of 60 years or less), hold the gain over instead of deducting it from the base cost. State the date it comes back into charge: the earliest of disposal of the replacement, it ceasing to be used in the trade, or 10 years from acquisition.
8State which company's profits include any gain taxed now, and remind the examiner the claim is time limited.

Quickest way: Three-line rollover check

When to use it: Use in objective test questions, or at the start of a written answer, when you need the answer fast.

Same group? Qualifying asset? Used in a group member's trade? Within 12 months before or 36 months after? If any answer is no, there is no relief.
Proceeds not reinvested = proceeds − cost of replacement. If this is zero or negative, the whole gain is deferred.
Taxed now = lower of the gain and proceeds not reinvested. Deferred = gain − taxed now. New base cost = replacement cost − deferred.

Common mistakes in Rollover Relief for Groups

Denying relief because a different company bought the replacement.
Students apply the single-company rule they learned for individuals and sole traders.
Fix: For a chargeable gains group, treat the members as one unit. The buyer can be any group member.
Deferring the whole gain when only part of the proceeds were reinvested.
Students forget that relief depends on reinvesting the proceeds, not the gain.
Fix: Work out the proceeds not reinvested. The gain taxed now is the lower of that figure and the gain.
Subtracting the deferred gain from the sale proceeds instead of from the cost of the replacement.
The deferred gain feels linked to the old asset.
Fix: Always deduct the deferred gain from the cost of the new asset to get its base cost.
Applying relief to assets that do not qualify, such as shares.
Students remember rollover relief is for business assets and assume anything used in business counts.
Fix: Check the asset is land and buildings or fixed plant and machinery, and used in the trade.
Using the wrong time window, such as 36 months either side.
The numbers 12 and 36 get mixed up.
Fix: Remember: 1 year back, 3 years forward.
Treating a depreciating asset like a normal replacement and reducing its base cost.
Students miss that fixed plant and machinery has a limited life.
Fix: A depreciating asset has an expected life of 60 years or less. The gain is held over, not deducted from the base cost. It returns to charge on the earliest of the three events: disposal of the replacement, it ceasing to be used in the trade, or 10 years from acquisition. The base cost stays at cost.

Worked examples

Example 1

A Ltd and B Ltd are members of the same chargeable gains group. In July 2026 A Ltd sells a warehouse used in its trade for £500,000. It cost £300,000. In March 2027 B Ltd buys a factory for £550,000, for use in its own trade. Show the effect of a rollover relief claim. Ignore indexation.

Show the solution

The companies are in the same group, so they are treated as one unit. Both assets are land and buildings used in a group trade.
Gain on warehouse = £500,000 − £300,000 = £200,000.
The factory was bought within 12 months after the disposal, so it is within the window.
Proceeds reinvested = £550,000, which is at least the £500,000 proceeds. So the whole gain is deferred.
Base cost of the factory = £550,000 − £200,000 = £350,000.

Answer: Gain taxed now: nil. Gain deferred: £200,000. Base cost of B Ltd's factory: £350,000.

Example 2

P Ltd and its 80% subsidiary S Ltd form a chargeable gains group. In May 2026 P Ltd sells land used in its trade for £800,000, producing a gain of £250,000. In October 2026 S Ltd buys a building for £700,000 for use in its trade. Calculate the gain taxed now, the gain deferred and the base cost of the building. Ignore indexation.

Show the solution

The companies are in a 75% group, so the claim is allowed. Both assets qualify.
Proceeds not reinvested = £800,000 − £700,000 = £100,000.
Gain taxed now = lower of the gain (£250,000) and £100,000 = £100,000.
Gain deferred = £250,000 − £100,000 = £150,000.
Base cost of building = £700,000 − £150,000 = £550,000.

Answer: Gain taxed now: £100,000 (in P Ltd's taxable total profits). Gain deferred: £150,000. Base cost of the building: £550,000.

Exam tips

In a scenario question, check the group status first. The examiner often hides a company that is held below 75%, or an indirect subsidiary where the principal company's effective interest is not more than 50%.
Look for the dates. A replacement bought more than 36 months after, or more than 12 months before, the sale does not qualify.
In objective test questions, the trap is usually partial reinvestment. Work out proceeds not reinvested before anything else.
In written answers, show the base cost of the replacement. It is an easy mark and shows you understand deferral.
Name the type of replacement asset. If it is fixed plant and machinery with an expected life of 60 years or less, say it is depreciating and explain when the gain returns.

Practice questions from The effect of a group corporate structure for corporation tax purposes

Rollover Relief for Groups in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

ACCA Strategic ProfessionalRollover Relief for Companies

Rollover Relief for Groups: frequently asked questions

What is group rollover relief?

It is rollover relief where one company in a chargeable gains group sells a qualifying asset and another group member buys the replacement. The group is treated as a single unit, so the gain on the sale can be deferred against the new asset.

What conditions must be met for group rollover relief?

The companies must be in a chargeable gains group. Both assets must be qualifying assets used in the trade of a group member. The replacement must be bought within 12 months before to 36 months after the disposal. A claim must be made within the time limit.

What happens if I do not reinvest all of the proceeds?

The gain taxed now is the lower of the gain and the proceeds not reinvested. The rest of the gain is deferred and reduces the base cost of the replacement.

Does the replacement asset have to be bought by the same company?

No. For a chargeable gains group, any member can buy the replacement. The members are treated as one unit for this relief.