Rollover Relief Question?

Pjdav

Can Someone please help me with the following question, i think i got the correct answer and the book is wrong.

On 1 Nov 16 Mike sold a factory used in his business for £600,000. The factory had cost £175,000. Mike had purchased a replacement factory for £750,000.

a) How much capital gain on the disposal of the original factory can be deferred by rollover relief claim?
for part "A" i got £425,000 which is correct.

However question "B" says if Mike's replacement factory instead cost him £500,000, the amount of the gain that would be chargeable to CGT in 2016/17 is :

The answer i got is £75,000 ( £425,000 will be used again 500,000 leaving 75,000 taxable)

but it says the correct answer is £100,000 but how ?

Thank you

douglasstroud

Because only £500,000 of the £600,000 that the factory was sold for was reinvested then £100,000 would become chargeable to CGT immediately