If you have sold a business asset and intend to buy a replacement but have not yet done so, you can declare that intention in your tax return for the year of sale and defer the gain straight away under section 153A of the Taxation of Chargeable Gains Act 1992. For individuals the declaration lapses on the third anniversary of the 31 January after the tax year of the sale, and for companies on the fourth anniversary of the end of the accounting period. If no replacement is bought and claimed by then, the tax becomes payable with interest from the date it was originally due.

What is provisional rollover relief?

Ordinary rollover relief under section 152 lets a trader defer a gain on a qualifying business asset by reinvesting the proceeds in another qualifying asset. The replacement can be bought from 12 months before to three years after the sale (section 152(3)). That creates a timing problem: the tax on the sale may be due before the replacement is bought.

Section 153A solves it. A person carrying on a trade can declare, in the return for the period of the disposal, that:

  1. all or a specified part of the proceeds will be used to acquire new assets that will be taken into use, and used only, for the trade;
  2. the acquisition will take place within the section 152(3) period; and
  3. the new assets will be within the classes listed in section 155.

Until the declaration stops having effect, relief is given as if the purchase had happened and a claim had been made (section 153A(2)). HMRC’s Capital Gains Manual at CG60310 stresses that this is a declaration, not a claim, and that the conditions of section 152 are not tested at this stage. They are tested when the substantive claim is made.

Which assets and businesses qualify?

The same rules apply as for a full claim. Both old and new assets must fall within the section 155 classes, which include buildings and interests in real property occupied and used only for the trade, fixed plant or machinery, ships, aircraft and hovercraft, goodwill, and certain agricultural and fishing quotas (helpsheet HS290, section 5). They do not have to be the same type. Mobile equipment such as a lorry does not qualify (HS290, section 7).

A non resident disposing of an interest in UK property can only roll the gain into another UK property interest (HS290, section 5.1). Companies can use section 153A too, through the company tax return.

How do you make the declaration?

The declaration goes in, or is attached to, the return for the tax year in which the old asset was sold. There is no set form. The optional form in HS290 can be used. Whatever format is chosen, CG60310 says it must identify:

  • you and your Unique Taxpayer Reference;
  • the old assets, the amount received for each and the date of each disposal;
  • how much of the proceeds of each old asset you intend to reinvest; and
  • the amount of provisional relief, meaning the gain being deferred.

On the Capital Gains summary pages, HS290 tells you to enter code PRO in box 8 or 20, or MUL with details in box 54 where more than one code applies. You then complete the return as if new assets had been bought for the amount specified. That amount can only be increased by amending the return; once the amendment window has closed, it can only be withdrawn in whole or part (CG60310).

If you intend to reinvest only part of the proceeds, the deferred gain is what would have been deferred had you bought a new asset for that part (HS290, section 18).

When does the declaration run out?

Section 153A(3) and (5) say the declaration stops having effect on the earliest of:

  • the date a valid rollover claim supersedes it;
  • the date you withdraw it; or
  • the “relevant day”, which is the third anniversary of the 31 January following the tax year of the disposal for capital gains tax, or the fourth anniversary of the last day of the accounting period of the disposal for corporation tax.

GOV.UK gives the example of a sale in May 2026: provisional relief can last until 31 January 2031. For a company, HMRC’s example at CG60310 is a sale in the accounting period ending 31 March 2022, where the declaration expires on 31 March 2026.

The relevant day falls after the end of the three year reinvestment window, which gives time to make the substantive claim. That claim has its own time limit: four years from the end of the tax year (or accounting period) in which the later of the disposal and the acquisition took place (HS290, section 16; CG60310). See time limits for tax claims.

What happens when you buy the replacement?

You make a claim under section 152, or section 153 if not all the proceeds were reinvested, giving the details of the old and new assets, dates, costs and relief. The claim replaces the declaration and the provisional relief becomes permanent to the extent it is covered by the claim. If you reinvest less than you declared, the declaration is superseded only in part and the rest lapses on the relevant day unless withdrawn earlier (CG60310).

If the replacement is a depreciating asset, such as fixed plant or a lease of 60 years or less, the gain is held over for a maximum of ten years instead of being rolled into the cost. See rollover relief into depreciating assets. If the old asset was only partly used in the trade, only the business part can be relieved; see rollover relief on partly used assets.

What if no replacement is bought?

  • Tax and interest. The tax on the original gain becomes due, with interest from the date it would originally have been payable until it is paid (HS290, section 18).
  • Tell HMRC early. If your plans change, you can withdraw the declaration by contacting HMRC. Doing so promptly limits the interest. If the relevant day passes with no claim and no withdrawal, HS290 says you should tell HMRC that the declaration has expired.
  • No time limit protection. Section 153A(4) allows the adjustments to be made by assessment even after the normal time limits. In HMRC v Benham (Specialist Cars) Ltd [2017] UKUT 0389 (TCC), the Upper Tribunal confirmed a discovery assessment is the correct route (CG60310).
  • No postponement. HMRC instructs its staff to refuse applications to postpone tax on the basis that a purchase is about to happen (CG60310).
  • Later claims still possible. If you later make a valid claim, the tax and interest can be repaid. Where the purchase falls outside the normal window, the claim is valid only if HMRC agrees to extend the time limit (HS290, section 18).

If the taxpayer dies while a declaration is in place, HMRC asks the personal representatives to withdraw it, and if they do not, it cannot assess them until the relevant day (CG60310).

Can the three year reinvestment window be extended?

Section 152(3) lets HMRC allow a later (or earlier) purchase. CG60300 says an extension may be given where you can show you had a firm intention to buy within the time limit, were prevented by circumstances beyond your control, and acted as soon as you reasonably could afterwards. Examples include the death or serious illness of a key person, litigation, title problems or difficulty finding a suitable asset. A late change of mind, or spending the proceeds on something else, will not normally qualify. HMRC will only decide once it has a valid claim with evidence of the purchase, and the First tier Tribunal cannot overturn a refusal.

How does it work in practice?

Illustration only. Sam, a sole trader, sells his workshop on 15 September 2026 for £400,000, with a gain of £120,000. He plans to buy larger premises but has not found any.

  • In his 2026 to 2027 return he declares that he will reinvest £400,000 and enters code PRO. No tax is payable on the gain on 31 January 2028.
  • He must buy, or exchange unconditional contracts, by 15 September 2029. The declaration lapses on 31 January 2031.
  • He buys new premises for £450,000 in March 2029 and makes a full claim. The new premises have a base cost of £330,000. The claim deadline is 5 April 2033.
  • If he had declared only £300,000, the £100,000 not to be reinvested would be taxed now and £20,000 of the gain deferred.
  • If he buys nothing, the tax on £120,000 is due with interest running from 31 January 2028.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.