Commentary

D2.402 Qualifying conditions

Corporate tax
Corporate tax | Commentary

D2.402 Qualifying conditions

Corporate tax | Commentary

Loss buying provisions

D2.402 Qualifying conditions

Where the following conditions are met, capital losses will be 'qualifying losses' and cannot be set against capital gains1:

  1.  

    •     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.  

    •     a capital loss is realised by that company on a disposal of an asset that was owned by it (a 'pre-change asset', see D2.404–D2.406) before the change in ownership (note the capital loss can be realised before or after the change)

The rules described in this article and in D2.403–D2.406, apply for accounting periods ending after 4 December 20053.

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