Last updated: 14 October 2026
Can you avoid Capital Gains Tax by reinvesting the proceeds?
Only in specific cases. Simply reinvesting sale proceeds in another property or in shares doesn’t defer or reduce Capital Gains Tax: you pay tax on the gain whatever you do with the money. But two reliefs let you postpone the tax when you reinvest. Business asset rollover relief applies when you sell a qualifying business asset and buy a new one within 3 years. EIS deferral relief applies when you invest a gain on any asset in Enterprise Investment Scheme shares.
The main reinvestment reliefs
| Relief | What you sell | What you must buy | Time window |
| Business asset rollover relief | Land, buildings or fixed plant used in your trade | Another qualifying business asset | 1 year before to 3 years after the sale |
| EIS deferral relief | Any asset | New EIS shares | 1 year before to 3 years after the gain |
| Incorporation relief | A whole business, with its assets | Shares in a new company | At the time of transfer |
| SEIS reinvestment relief | Any asset | SEIS shares | Same tax year; exempts 50% of the gain reinvested |
What doesn’t qualify
- Selling one buy-to-let and buying another
- Selling shares and buying more shares, other than EIS or SEIS
- Selling a second home and putting the money into your main home
- Investing in an ISA or pension (though a pension contribution can extend your basic rate band)
How rollover relief works
The gain on the old asset is deducted from the cost of the new one, so tax is postponed until the new asset is sold. If you reinvest only part of the proceeds, the part you keep is taxable straight away. The assets must both be used in your trade. Furnished holiday lettings used to qualify, but that regime ended from 6 April 2025, so a holiday let sold now can’t be rolled over.
Example
A haulage business sells its depot in 2026/27 for £500,000, with a gain of £150,000. It buys a new, larger depot for £600,000 eighteen months later. The full gain is rolled over, so no tax is due now, and the new depot’s base cost becomes £450,000. If it had spent only £420,000, £80,000 of the gain would be taxable now.
EIS deferral
If you invest the gain in EIS shares, the gain is frozen until you sell the shares or they stop qualifying. You can also get 30% income tax relief on the EIS investment. These are higher-risk investments in small unquoted companies, so take advice before investing.
Reducing CGT in other ways
- Use your own and your spouse’s £3,000 annual exempt amounts
- Time the sale in a year when your income is lower
- Make pension contributions to extend your basic rate band
- Claim Business Asset Disposal Relief at 18% on qualifying business disposals
Frequently asked questions
Can a company use rollover relief?
Yes, but not for goodwill or intangible assets, which have separate rules.
Is there a time limit to claim?
Usually 4 years from the end of the tax year of the later event.
Can I roll a gain into a property I’ll let out?
No, a let property isn’t a trading asset.
Does reinvesting reduce IHT?
Some business assets may qualify for business relief.
Related: rollover relief and holiday lets, incorporation relief and CGT on disposing of property.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with deferring Capital Gains Tax. See our small business accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
