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HMRC internal manual

Capital Gains Manual

Restrictions: capital losses: outline summary: time-apportionment


  • a company brings an asset into a group, or
  • an asset held by a non-resident group member becomes a chargeable asset by virtue of coming within the scope of the charge to corporation tax on chargeable gains,

and the asset is subsequently disposed of at a loss, the loss set-off restrictions apply to the pre-entry proportion of the loss. This involves time-apportioning the loss by reference to each tranche of acquisition or enhancement expenditure included in the loss computation. See CG47620+.

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.