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HMRC internal manual

Capital Gains Manual

Restrictions: capital losses: deduction of pre-entry losses

The rules restricting the set-off of pre-entry losses against gains are in terms of individual loss assets and individual gain assets. So there are identification rules for determining the particular losses set off against particular gains. See CG47880+. Pre-entry losses not available for set-off are carried forward, and retain their identity as pre-entry losses in relation to the group concerned.

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.