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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Deferred consideration: unascertainable: election for treatment of loss - further specified conditions - Condition 2


Condition 2, see CG15083 above, is that there must be a year of assessment, an “eligible year”, for which the following requirements must be met:

  1. the year must be earlier than the year of the loss but not earlier than 1992-93 (the earliest year for which TCGA92 has effect)
  2. a chargeable gain (including “revived gains”, see CG15087 satisfying Condition 1, see CG15085, must have accrued to the taxpayer in the year;
  3. the taxpayer must, immediately before the election is made, have a residual CGT liability for the year which has not been extinguished on account of deductions made in consequence of previous elections made under TCGA92/S279A in relation to other losses. The question as to whether there is a residual CGT liability is determined without taking account of any chargeable gains from which the taxpayer is not entitled to deduct allowable losses. (Trust gains which are treated as chargeable gains accruing to beneficiaries of a settlement in accordance with TCGA92/S87(4) provide an example of gains from which the beneficiaries cannot deduct allowable losses. If the taxpayer, for any year from 1998-99 onwards, has gains attributed to him under any of sections 77, 86, 87 or 89(2) TCGA92 by reason of his being the settlor or beneficiary of a settlement, see CG15101).