CG47521 - Restrictions: capital losses: outline summary: time-apportionment
Where
- 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 the Finance Act (FA) 2006. See CG47020P for guidance on the rules which apply in priority to Schedule 7A of the Taxation of Chargeable Gains Act 1992 for accounting periods ending on or after 5 December 2005.
Section 46 of the FA 2011 and Schedule 11 FA 2011 greatly simplified the rules in Schedule 7A of the Taxation of Chargeable Gains Act 1992 for the deduction of losses on or after 19 July 2011. See CG47400P for guidance on loss streaming from that date.