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HMRC internal manual

Capital Gains Manual

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

The FA 2006 amendments to TCGA92/S8 will not apply where there is a genuine commercialtransaction that gives rise to a real commercial loss as a result of a real commercialdisposal. In these circumstances there will be no arrangements with a main purpose ofsecuring a tax advantage. Conversely, where there is either no genuine commercialdisposal, or no real commercial loss, or no real commercial disposal or any combination ofthe foregoing then there are likely to be arrangements in place with a main purpose, orone of the main purposes, of securing a tax advantage so the legislation will apply.