Taxation of Chargeable Gains Act 1992 section 184A

Restrictions on buying losses: tax avoidance schemes

Section 184A prevents companies from using capital losses arising from tax avoidance arrangements that involve a change of ownership, by denying the deductibility of those losses against chargeable gains.

• Where a company undergoes a qualifying change of ownership connected with arrangements designed to secure a tax advantage, any capital loss arising on the disposal of a pre-change asset is blocked from being set against chargeable gains.
• A pre-change asset is one held by the company before the change of ownership took place, and the loss can arise in the company itself or in any other company involved.
• The term "arrangements" is drawn very broadly to cover any agreement, understanding, scheme, transaction, or series of transactions, whether or not they are legally enforceable.
• The timing of the loss is irrelevant — it does not matter whether it arises before, after, or at the time of the ownership change, nor does it matter whether any chargeable gains exist at that point or which company benefits from the tax advantage.