Taxation of Chargeable Gains Act 1992 Schedule 7AA paragraph 6

Special rule for losses on disposal of certain assets acquired at different times

Paragraph 6 of Schedule 7AA deals with how losses are calculated when a company disposes of an asset that was built up through acquisitions at different times, some of which may have been from members of the same group.

• Where a single asset has been acquired in parts at different times, and some of those acquisitions were from fellow group companies, a special loss calculation applies on disposal.
• The rule requires the overall loss to be split between the portions acquired from group companies and those acquired from outside the group, based on respective base costs.
• The portion of any loss attributable to intra-group acquisitions may be restricted or disallowed under the degrouping and anti-avoidance provisions of Schedule 7AA.
• This rule was introduced by Finance Act 2006 and prevents companies from circumventing loss restriction rules by merging group-acquired assets with externally acquired ones.

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