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HMRC internal manual

Capital Gains Manual

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


If some but not all of the assets disposed of are pre-entry assets, the actual loss is treated by paragraph 3 Schedule 7A as a loss on the disposal of a pre-entry asset. And the supplemental rules increasing the pre-entry loss, by reference to a comparison between post-entry expenditure and expenditure actually allowed, are in paragraph 4(3) and (4) Schedule 7A.

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.