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HMRC internal manual

Capital Gains Manual

Capital loss buying: approach prior to FA 1993: general

Where there are arrangements designed to bring together a gain and a loss into the hands of a single company, but the gain or the loss is substantially attributable to a period when the assets were not in the same group, you may, in individual cases, be able to argue that the disposals which crystallised the gain or loss were made by the company or companies which transferred the assets to the transferee company, rather than by the transferee company itself.

To develop such an argument you would need to be able to demonstrate that

  • in reality, a contract for the eventual disposal of the asset which crystallised the gain or loss was agreed by the transferor company, before the asset was transferred to the transferee company;


  • the arrangements are susceptible to the Ramsay approach.

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.