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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Deduction of pre-entry losses: order of set-off: APs pre-16/3/93

The following rules apply where you have to determine the order of set-off for any accounting period ending before 16 March 1993.

  • Pre-entry losses accruing in the period are deducted from gains in priority to any other losses accruing in the period.
  • Pre-entry losses carried forward to the period are deducted from gains in priority to any other losses carried forward to the period.
  • Subject to these rules, pre-entry losses carried forward to an accounting period ending on or after 16 March 1993 are identified with such losses as may be specified in an election made for the purpose by the company to which the losses accrued. The time limit for an election is two years from the end of the accounting period which includes 16 March 1993.

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.