The rules in this article apply only where the loss buying rules (¶Ù2.402–D2.404) do not apply. This is normally only in cases where there is no arrangement for avoiding tax, eg on a merger or takeover.
Utilisation of pre-entry losses
A pre-entry loss can only be set against1:
- Ìý
•ÌýÌýÌýÌý gains that accrued to the company on a disposal made by the company before the date on which it became a member of the group2
- Ìý
•ÌýÌýÌýÌý gains realised on an asset which was held by the company immediately before the date on which it became a member of the group3, or
- Ìý
•ÌýÌýÌýÌý gains arising on the disposal of certain assets acquired for trade purposes in a trade carried on by the company with the pre-entry loss immediately before becoming a member of the relevant group, which was continued until the disposal 4 (see D2.426)
In addition there are special rules regarding the set-off of pre-entry losses when:
- Ìý
•ÌýÌýÌýÌý group members join
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