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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 16/3/93p

If a company entitled to make an election fails to make an election, paragraph 6(4) Schedule 7A applies the following rules, so far as consistent with any elections which have been made.

  • Earlier accrued losses are set off before later accrued losses.
  • Losses are set off against earlier gains in priority to later gains.

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.