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HMRC internal manual

Capital Gains Manual

Restrictions: capital losses: introduction: general

There is no form of group relief for the capital losses of companies. A company cansurrender trading losses and other items to another company in the same group, see CT2670.But a company cannot surrender its allowable capital losses for set-off against thechargeable gains of another group member. Groups can however take advantage of the nogain/no loss rule for intra-group asset transfers, see CG45305, to achieve much the sameresult. A group can transfer an asset with a latent gain at no gain/no loss to a groupcompany with a realised loss, and then sell the gain asset outside the group. The gaincrystallises in the company with the allowable loss, and the loss is set off against thegain. Alternatively, a group can transfer an asset with a latent loss at no gain/no lossto a company with a chargeable gain, and then crystallise the loss in the gain company.Here too the result is to bring together in one company an allowable loss and a chargeablegain. Provided the gain crystallises in the same accounting period as the loss, or in alater accounting period to which the loss is carried forward, the tax charge is only onthe net gain, if any.