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HMRC internal manual

Capital Gains Manual

Targeted anti-loss buying rule - interaction with Schedule 7A

TCGA92/S184A to F will apply whenever there is a change of ownership of a company that occurs directly or indirectly in consequence of, or in connection with arrangements. Where a main purpose of the arrangements is to secure a tax advantage involving the deduction of a capital loss from any chargeable gains then that loss may not be deducted from the gains.

The existing legislation at TCGA92/SCH7A remains applicable in all cases that do not involve arrangements to secure a tax advantage, including the vast majority of mergers and acquisitions. But where there is a tax avoidance purpose, TCGA92/S184A to F take effect in priority to the earlier provisions in TCGA92/SCH7A.