What was the purpose of section 188E of the Taxation of Chargeable Gains Act 1992?

Section 188E provided additional rules governing how losses within a corporate group could be utilised in the context of disposals of UK residential property interests by non-UK resident companies. It formed part of sections 188A to 188K, introduced by the Finance Act 2015, effective for disposals on or after 6 April 2015.

When was section 188E of TCGA 1992 repealed and by which legislation?

Section 188E was repealed by section 13 and Schedule 1, paragraph 68 of the Finance Act 2019. For capital gains tax purposes, the repeal took effect from the 2019–20 tax year onwards. For corporation tax purposes, it applied to accounting periods beginning on or after 6 April 2019.

Why were sections 188A to 188K of TCGA 1992 removed from the legislation?

Sections 188A to 188K were removed as part of a significant overhaul introduced by the Finance Act 2019. This restructuring broadened the scope of UK property gains subject to tax for non-UK residents and replaced the former group loss rules with updated provisions under a new comprehensive regime.

Are the old group loss rules under section 188E still relevant for any tax computations?

Yes, the old rules under sections 188A to 188K may still be relevant for historical tax computations or HMRC enquiries relating to disposals or accounting periods before the repeal took effect. For current disposals, accountants should refer to the replacement regime introduced by the Finance Act 2019.

Taxation of Chargeable Gains Act 1992 section 188E

Further provision about group losses

Section 188E provided additional rules about how losses within a corporate group could be used in the context of disposals of UK property interests by non-UK residents, but this section has now been repealed.

Section 188E was part of a suite of provisions (sections 188A–188K) introduced by the Finance Act 2015, effective for disposals made on or after 6 April 2015.
These provisions dealt with group losses arising on disposals of interests in UK land by non-UK resident companies and related entities.
The entire suite of sections 188A–188K was removed from the legislation by the Finance Act 2019, reflecting a broader restructuring of how non-UK residents are taxed on UK property gains.
The repeal took effect for capital gains tax purposes from the 2019–20 tax year onwards, and for corporation tax purposes for accounting periods beginning on or after 6 April 2019.

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