Commentary

D2.447 Special calculation—Calculation of pre-entry loss

Corporate tax
Corporate tax | Commentary

D2.447 Special calculation—Calculation of pre-entry loss

Corporate tax | Commentary

D2.447 Special calculation—Calculation of pre-entry loss

The rules in this article were repealed in relation to the set off of pre-entry losses on or after 19 July 2011, subject to transitional rules (see D2.414). Prior to 19 July 2011, the rules in this article applied only where the loss buying rules (D2.402–D2.406) did not apply (ie where there was no arrangement for avoiding tax, eg on a merger or takeover).

Where the special calculation applies, it takes one of two forms, subject to the election available for an alternative calculation (see D2.449). The form taken by the special calculation depends on whether, as determined for the general calculation, the disposal is one that:

  1.  

    •     consists entirely of post-entry assets1, or

  2.  

    •     includes pre-entry assets2

Disposal where all assets consist of post-entry assets

For the purposes of the general calculation, a loss on a disposal consisting entirely of post-entry assets of a pooled asset is not subject to restriction and there is no need to calculate a pre-entry

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