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HMRC internal manual

Capital Gains Manual

Administration: losses: targeted rules to prevent the contrived creation of capital losses by companies - time of use of losses immaterial

In order to prevent abuse either where losses are created for immediate use or for use infuture years, the legislation in TCGA92/S8 as amended by FA2006 (TCGA92/S16A with effectfrom 6 December 2006 – see CG40241) applies even if, at the time the loss arises,there are no chargeable gains from which the loss could otherwise have been deducted.

This is to ensure that losses created in year 1, but not used until year 2 can still besubject to the legislation.