Income Tax Act 2007 section 142

The gross assets requirement

Section 142 sets out the gross assets limits that a company (or group) must satisfy at the time shares are issued in order for share loss relief to be available.

• A single company's gross assets must not exceed £7 million immediately before the relevant shares are issued and must not exceed £8 million immediately afterwards.
• Where the company is a parent company, the same £7 million and £8 million limits apply to the combined gross assets of the entire group.
• Group assets are calculated by adding together each member's gross assets, but ignoring any intra-group items such as rights against, shares in, or securities of another group member.
• A "single company" is one with no qualifying subsidiaries; a "parent company" is one with at least one qualifying subsidiary, and a "group" means the parent together with all its qualifying subsidiaries.