Taxation of Chargeable Gains Act 1992 Schedule 7A paragraph 11

Continuity provisions

Section 11 provides relief from the pre-entry loss restrictions where losses are transferred as part of a public sector restructuring carried out under statute, ensuring that such losses are not caught by the anti-avoidance rules that would otherwise restrict their use within a group.

• Where property, rights and liabilities are transferred from a public sector body, its subsidiary, or a Crown-owned company under statutory transfer legislation, losses that pass to the receiving company as part of that transfer are not treated as pre-entry losses
• A loss transferred in this way is protected provided it accrued to the transferring body and is treated by the transfer legislation as a loss of the receiving company
• Where a company joins a group because its shares or securities are transferred under such legislation, any loss that accrued to that company before it joined the group is not treated as a pre-entry loss
• A company is regarded as wholly owned by the Crown if all its shares are held by the Treasury, a Minister of the Crown, a Northern Ireland department, or another Crown-owned company, or if it is a guarantee company whose only members are such persons or their nominees