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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Gains from which pre-entry losses are deductible: change in trade

The conditions in paragraph 8(1) and (2) substantially reproduce those in ICTA88/S768 (1) and (4), which disallow trading losses on a change of ownership of a company. You should follow the instructions at CT1207 - CT1209 in determining whether there has been a major change in the nature or conduct of the trade, or whether there has been a considerable revival in a near-dormant trade.

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.