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HMRC internal manual

Capital Gains Manual

Restrictions: pre-entry loss: alternative market value calculation

If the deemed market value disposal at the relevant time does not result in a loss, the loss on the actual disposal is deemed not to have a pre-entry proportion. If, in the example in CG47720 above, the market value of the asset at 1 January 1988 had been £12.5M or any greater amount, the election would have eliminated the pre-entry proportion of the allowable loss.

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.