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HMRC internal manual

Capital Gains Manual

Restrictions: pre-entry loss: anti-flooding rule for pooled assets


The relevant allowable expenditure allowed as a deduction is the amount of acquisition and enhancement expenditure within TCGA92/S38 (1)(a) and (b). In relation to disposals before 30 November 1993, it also includes the indexed rise, see CG47683. Where there is a part-disposal to which TCGA92/S42 applies, the acquisition and enhancement expenditure is the deductible amount after applying the part-disposal formula in Section 42(2).

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.