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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Schedule 7AA TCGA 1992: restrictions on capital losses: restriction on loss set off


The amount to be included in the relevant company’s total profits for the gain period is calculated by adding together separate amounts in respect of the pre-entry gains and of other gains in the accounting period. This effectively ring fences the pre-entry gains so that the restrictions on setting off losses can be applied to them. Separate calculations are therefore needed of

  • the `adjusted pre-entry gains’ (see CG48204), and
  • all other gains (if any) made in the accounting period. These gains are calculated under the normal CG rules after disregarding all pre-entry gains and any losses set against them in accordance with Schedule 7AA.

Any losses which are set off in adjusting the pre-entry gains are not available for carry forward to later accounting periods.

Note: New rules relating to gain buying were enacted in FA 2006. See CG47320+ for guidance on the rules which apply for accounting periods ending on or after 5 December 2005.