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HMRC internal manual

Capital Gains Manual

Restrictions: capital losses: election for alternative MV calculation

As an alternative to time-apportionment, a company can elect for the pre-entry proportion of the loss to be computed by reference to the asset’s market value at the time a company brought the asset into the group or when the asset was brought within the scope of the charge to corporation tax on chargeable gains. See CG47720+.

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.