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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Administration: losses: targeted rules to prevent the contrived creation of capital losses by companies - general

Anti-avoidance provisions were introduced in FA 2006 (called Targeted Anti-Avoidancerules, or ‘TAARs’ for short). They included a measure to counter the contrivedcreation of capital losses by companies (known as TAAR1).

The legislation was announced in the Chancellor’s Pre Budget Report (“PBR”)on 5 December 2005 and is effective from that date. See CG40241.

A statement of principles, draft guidance document and draft legislation were published atPBR. The statement of principles, on which the legislation was based, and final version ofthe published guidance document can be found at appendix 8.