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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
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Deduction of pre-entry losses: general

The general set-off rules are in paragraph 6(1) Schedule 7A. You apply these rules to determine the amount to be included in respect of chargeable gains in a company’s total profits for any accounting period.

  • You first deduct from any chargeable gain the whole or any part of any pre-entry loss accruing in the period which is deductible from the gain under the rules in paragraph 7 Schedule 7A.
  • You next deduct from any remaining chargeable gain the whole or any part of any pre-entry loss carried forward to the accounting period which is deductible from the gain under the rules in paragraph 7 Schedule 7A.
  • You next deduct from any remaining chargeable gains any allowable losses which are not pre-entry losses, applying the rules in TCGA92/S8 (1).

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.