Groups to which loss set-off restrictions apply: other groups in same AP
TCGA92/SCH7A/PARA9 (2) (c)
If there is a group within paragraph 9(2)(a), that is a group (or the most recent group) into which a company has brought a loss realised pre-entry, paragraph 9(2)(c) Schedule 7A also covers any other group of which the company was a member in the same accounting period as that in which it joined the group in question.
Company LV has a calendar year accounting period.
On 1 January 1992, LV joins the L group holding asset X, which it disposes of at a loss on 30 June 1993.
On 30 September 1993, LV leaves the L group and joins the M group.
LV’s loss on asset X is a realised pre-entry loss in relation to the M group, which LV joined in its accounting period to 31 December 1993. As the asset was held by LV when it joined the L group, of which it was a member in the same accounting period, the Schedule 7A restrictions apply to the loss in relation to the L group as well as the M group.
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.