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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: common group membership


Paragraph 9(7) Schedule 7A contains a special rule for cases where a group’s principal company is controlled by a member of a different group, and the principal company becomes a member of that second group. In this situation paragraph 9(6) Schedule 7A disapplies Section 170(10), so that the two groups are treated as separate groups for the purposes of paragraph 9 Schedule 7A. If, in relation to the disposal of an asset at a loss, the loss set-off restrictions apply to a third group within paragraph 9(2)(a), (b) or (c), and the principal company of the third group has been a member or has been controlled by a member of one of the first two groups, it is treated as having been a member of each of those two 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.