Q If I sell a buy-to-let property and immediately use proceeds to buy another, is the payment of capital gains tax deferred?
A Short answer: no. You are clearly hoping that selling a buy-to-let property and buying another would make you eligible to claim business asset roll-over relief but it doesn’t. Roll-over relief lets you put off paying any capital gains tax (CGT) due on the gain from the sale of a business asset until you sell the business asset that you bought to replace it but only – among other things – if you are trading. And HM Revenue & Customs (HMRC) doesn’t consider investing in a buy-to-let property as trading.
HMRC does, however, have special rules that mean that if you make money from furnished holiday lettings you would be eligible to claim roll-over relief if you sold a holiday let and bought another one. To count as a furnished holiday letting – and so qualify for roll-over relief – the property must be furnished and available for letting for at least 210 days in the tax year and let as holiday accommodation for at least 105 days. More information on who can claim the relief – and how to do it – is available in Helpsheet 290: Business Asset Roll-over Relief published by HMRC.