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HMRC internal manual

Capital Gains Manual

Restrictions: pre-entry loss: alternative MV calculation: initial period

As the provisions of Schedule 7A can operate in relation to losses which arise on disposal of assets by companies which became members of the relevant group on or after 1 April 1987, they may apply in situations where elections would be beneficial, but companies are not given a reasonable opportunity to make an election. The Board have extended the period for elections for cases where the time limit would expire earlier then two years after the 1993 Finance Bill received Royal Assent. This was on 27 July 1993.

You should accept elections under paragraph 5(8) Schedule 7A as made in time in all cases where they are made within two years of the date of Royal Assent, that is by 27 July 1995.

This extension was announced in the May 1994 Edition of Tax Bulletin. The extension is not intended to otherwise affect the normal operation of the provisions. In any case where the normal time limit would fall at a later date, that date will remain the appropriate limit for elections in that case.

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.