18(1)Schedule 7A to TCGA 1992 (restriction on set-off of pre-entry losses) is amended in accordance with this paragraph.
(2)In paragraph 6(1)(b), after “from that gain” insert “(subject to sub-paragraphs (1A) to (1C))”.
(3)In paragraph 6(1)(c), after “section 2A(1)” insert “(subject to sub-paragraphs (1A) to (1C))”.
(4)After sub-paragraph (1) insert—
“(1A)Sub-paragraph (1B) applies, in respect of an accounting period, if the amount of chargeable gains accruing to the company in the period exceeds the total of—
(a)the amount of pre-entry losses accruing to the company in the period that are deductible under sub-paragraph (1)(a), and
(b)the amount of allowable losses, other than pre-entry losses, accruing to the company in the period.
(1B)Where this sub-paragraph applies in respect of an accounting period—
(a)the sum of any deductions under sub-paragraph (1)(b) may not exceed the total of—
(i)the amount of pre-entry losses that, on the assumption in sub-paragraph (1C), would be deductible under sub-paragraph (1)(b), and
(ii)the amount of allowable losses (other than pre-entry losses) that, on the assumption in sub-paragraph (1C), would be deductible under section 2A(1), and
(b)for the purposes of sub-paragraph (1)(c), the deductions made under section 2A(1) may not exceed the difference between—
(i)the total of the amounts mentioned in paragraph (a)(i) and (ii), and
(ii)the amount of pre-entry losses deducted under sub-paragraph (1)(b).
(1C)The assumption is that deductions under sub-paragraph (1)(b) are treated for the purposes of Part 7ZA of CTA 2010 (restrictions on obtaining certain deductions) as if they were made under section 2A(1)(b) of this Act.”