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HMRC internal manual

Capital Gains Manual

Restrictions: capital losses: introduction: general


FA93/S88 and FA93/SCH8 introduced a new TCGA92/S177A and TCGA92/SCH7A into TCGA92. These provisions restrict the set-off of capital losses brought into a group of companies as a result of a company joining a group on or after 1 April 1987. The losses may have arisen before the company joined the group, or they may arise on a subsequent disposal of an asset which a company brings into a group. The provisions limit the scope for capital loss buying, but they are not confined to cases where a group acquires a company wholly or mainly to obtain the benefit of realised or unrealised capital losses.

FA11/S46 and FA11/SCH11 greatly simplified the rules in TCGA92/SCH7A for the deduction of losses on or after 19 July 2011 (the day Finance Act 2011 was passed). See CG47400+ for guidance on loss streaming from that date.