There are transitional rules for the corporate capital loss restriction (see D1.1108B) in relation to the following:
Transitional rules for corporate capital losses—periods straddling 1 April 2020
Where an accounting period straddles the 1 April 2020, for the purposes of capital gains and losses only, the accounting period is split into notional pre-commencement and post-commencement periods1.
Chargeable gains and losses will accrue to each of these notional periods in accordance with the normal date of disposal rules for capital gains (see C1.322), with losses of one period being relievable against gains of the other without restriction. It is only the use of carried-forward capital losses in the post-commencement notional period that will be subject to the corporate capital restriction.
There is no requirement to apportion the deductions allowance for the post-commencement period where the straddling period is for a full year, so the deductions allowance due will be £5 million2.
In determining how to use any carried-forward capital losses in the straddling accounting period, the calculation can be carried out in the following order (depending on the specific fact pattern, not all of the steps will be needed):
• compute the net gain or loss of the pre-commencement period
• compute the