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HMRC internal manual

Capital Gains Manual

Gains from which pre-entry losses are deductible: introduction


The rules ring-fencing the gains from which pre-entry losses can be deducted are in paragraph 7 Schedule 7A. The rules deal separately with

  • losses realised pre-entry, see CG47771


  • pre-entry losses on assets brought into the relevant group, see CG47777.

In each case there are additional provisions dealing with multiple company cases where two or more companies leave one group to join another group at the same time.

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.