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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Groups to which loss set-off restrictions apply: other groups in same AP

This extension covers the possibility of a group avoiding the provisions of Schedule 7A by realising within the loss vehicle the gain which it hopes to shelter, and then selling the loss vehicle to an unconnected group before the loss is realised. So long as the loss is realised in the same accounting period of the loss vehicle company, it would be able to set the loss against the gain. As amended, paragraph 9(2)(c) will now identify both the group in which the loss is realised, and the earlier group, as relevant groups for the purposes of Schedule 7A.

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.