Your manager has had a number of telephone conversations with Gomez, a potential new client. Gomez owns the whole of the ordinary share capital of Helm Ltd.
Extracts from the memorandum prepared by your manager setting out the matters discussed and an email from your manager in connection with the Helm Ltd group are set out below.

Extracts from the memorandum

Helm Ltd purchased the whole of the ordinary share capital of Drill Ltd on 1 April 2015. Drill Ltd has capital losses to carry forward as at 31 March 2015 of £74,000.

Cog Ltd
 On 1 May 2015, Cog Ltd sold a warehouse for £470,000. Cog Ltd had owned the warehouse for almost two years and had rented it to a tenant throughout this period. Cog Ltd had always intended to bring the warehouse into use in its trade at some point in the future, but before this could happen, it sold the warehouse and realised a chargeable gain of £82,000.

Email from your manager 
Additional information
1. All of the companies are UK resident trading companies. 
2. All of the companies are profitable and prepare accounts to 31 March each year.

Please carry out the following work in preparation for a meeting with Gomez.

(c) Cog Ltd
— chargeable gain on the sale of the warehouse Explain: whether or not the chargeable gain on the sale of the warehouse can be relieved by rollover relief;

— and how Drill Ltd's capital losses can be relieved; in particular, whether or not they can be offset against the chargeable gain made on the sale of the warehouse by Cog Ltd.

Required: Carry out the work required as requested in the email from your manager. 
The following marks are available:

(c) Cog Ltd — chargeable gain on the sale of the warehouse.          (4 marks)