Roll-over relief



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If roll-over relief is available under the UCA rules, no balancing adjustment amount arises on the balancing adjustment event that happens when a change occurs in the holding of or in the interests in a depreciating asset.

In some cases, roll-over relief is automatic-transfers pursuant to a court order following a marriage breakdown and transfers to a wholly-owned company or to another member of a wholly-owned group.

In some cases, roll-over relief must be chosen-if the event arises from a variation in the constitution of a partnership or in a partnership interest. The transferor and the transferee must jointly choose the roll-over relief.

When roll-over relief applies, the transferee of the depreciating asset can claim deductions for the asset's decline in value as if there had been no change in holding.

If the transferor used the prime cost method to work out decline in value, the transferee should use the same method and must use the adjusted prime cost formula-see Methods of working out decline in value.

There are specific record keeping requirements for roll-over relief-see Roll-over relief.

Last modified: 01 Jun 2005QC 27399