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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Restrictions: capital losses: gains from which pre-entry losses deductible

There are restrictions on the set-off rules applying to trade assets where there is a major change in the nature or conduct of a trade in the three year period before or after the trading company joins the group. Or where there is a revival of a trade which is near-dormant at the time the trading company joins the group. See CG47840+.

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.