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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Restrictions: capital losses: identifying pre-entry losses: relevant time

TCGA92/SCH7A/PARA1 (5)

A number of the detailed rules in Schedule 7A use the phrase ‘the relevant time’. Before 21 March 2000 this is the time the company holding the pre-entry asset became a member of the relevant group.

From 21 March 2000, if the company holding the pre-entry asset was resident in the UK when it became a member of the group, or the asset was a “chargeable asset” in relation to the company when it became a member of the group, the relevant time is the time when the company became a member of the group. In other cases, the relevant time is the earlier of the date on which the company holding the pre-entry asset became resident in the UK, or the asset became a “chargeable asset” in relation to that company.

An asset is a “chargeable asset” in relation to a company at any time if a gain on disposal of the asset by the company would be chargeable to corporation tax under TCGA92/S10B because the asset was used or held for the purposes of a trade carried on in the UK through a permanent establishment.

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.