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HMRC internal manual

Capital Gains Manual

Targeted anti-gain buying rule - general

TCGA92/S184B 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.

Where the rules apply any gains arising on assets owned by a company at the time of its change of ownership will only be capable of being franked by capital losses deriving from assets it held before the change. The acquiring company or group will not be able to offset its capital losses against gains arising in its new subsidiary.