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HMRC internal manual

Capital Gains Manual

Restrictions: pre-entry loss: time-apportionment: reorganisations


There is a special time-apportionment rule in paragraph 2(4) Schedule 7A for consideration given on a reorganisation of share capital, for example on a rights issue. Such consideration is related back to the time of acquisition of the original shares, except for the purpose of computing indexation. There is further detail at CG47664+, following the general description of how share reorganisations are treated for Schedule 7A purposes.

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.