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D2.402 Restrictions on buying losses—qualifying conditions

The overall policy aim of these targeted anti-avoidance provisions is that a company's capital losses should only be available against its own capital gains or those of companies that were under the same economic ownership when the loss arose and when the loss is utilised. Where the following conditions are met, capital losses will be 'qualifying losses' for the purposes of the loss buying rules and cannot be set against capital gains¹:

1. Ìý

   •ÌýÌýÌýÌý there has been a qualifying change in the ownership of a company and the change of ownership was part of an arrangement (including any agreement, understanding, scheme, transactions or series of transactions, whether or not legally enforceable²), one of the main objects of which was to obtain a tax advantage by deducting a capital loss from any chargeable gain, and

2. Ìý

   •ÌýÌýÌýÌý a capital loss is realised by that company on a disposal