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General set-off rule

The rules in this article apply only where the loss buying rules (¶Ù2.402–D2.404) do not apply. They will normally only apply in cases where there is no arrangement for avoiding tax, eg on a merger or takeover.

In general, the chargeable gains figure included in a company's tax return is the total amount of chargeable gains accruing to the company in the accounting period¹, after deducting any allowable losses both:

1. Ìý

   •ÌýÌýÌýÌý accruing to the company in the period, and

2. Ìý

   •ÌýÌýÌýÌý previously accruing to the company while it has been within the charge to corporation tax (so far as they have not been allowed against chargeable gains in a previous accounting period)

Pre-entry losses

The general rule is modified where a company has pre-entry losses. In this situation a pre-entry loss is given priority for set-off against gains, provided that the capital loss set-off restrictions (see D2.425) specify that the pre-entry loss is deductible².

The rules regarding the order of