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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Groups to which loss set-off restrictions apply: connected groups

The Schedule 7A rules apply separately to each of the connected groups for the purpose of determining whether any loss is a loss on the disposal of a pre-entry asset, and for calculating the pre-entry proportion of the loss. If there is a loss on an asset which is a pre-entry asset in relation to more than one of the connected groups, the pre-entry proportion of the loss is the largest pre-entry proportion calculated for any of the connected groups.

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.