Page 92 - P6 Slide - Taxation - Lecture Day 1

Roll-overs

Acquire replacement asset within 12 months after involuntary

disposal

Replacement asset will be brought into use within 3 years of the

involuntary disposal

• If not - deferred capital gain will be treated as capital gain on

the date on which the prescribed period ends.

• In addition, he must determine interest at the ‘prescribed

rate’ on the capital gain

– from the date of the disposal to the end of the prescribed period

– Interest treated as an additional capital gain.

• There is no requirement that the replacement asset must

fulfil the same function as the old asset.