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HMRC internal manual

Capital Gains Manual

Restrictions: capital losses: outline summary: general

The provisions restrict the set-off of losses against chargeable gains where

  • a company brings a realised loss into a group,


  • a company brings an asset into a group and there is a loss on a disposal of the asset by any group company,


  • a non-resident group member becomes resident in the UK and subsequently there is a loss on a disposal, by any group company, of an asset which the non-resident company owned at the time it became resident,


  • a non-resident group member introduces an asset into a UK permanent establishment other than immediately upon acquisition of the asset, and subsequently there is a loss on a disposal of that asset by any group company.

The third and fourth bullet points above refer to a non-resident group member. Companies not resident in the UK can be members of a group from 21 March 2000 as a result of the removal, by FA2000/SCH29/PARA1, of the residence restriction for group membership.

See CG47560+.

Note: Additional rules relating to loss buying were enacted in FA 2006. See CG47020+ for guidance on the rules which apply in priority to TCGA92/SCH7A for accounting periods ending on or after 5 December 2005.

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