Revenue Note for Guidance

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Revenue Note for Guidance

546A Restrictions on allowable losses


This section disallows capital losses if they arise from arrangements whose main purpose or one of whose main purposes is to secure a tax advantage.


The following definitions apply in this section:

(1)arrangements” includes any agreement, understanding, scheme, transaction or series of

transactions (whether or not they are legally enforceable);

tax advantage” means —

  • relief or increased relief from tax,
  • repayment or increased repayment of tax,
  • the avoidance or reduction of a charge to tax or an assessment to tax, or
  • the avoidance of a possible assessment to tax;

tax” means capital gains tax or corporation tax on chargeable gains;

(2) A loss will not be an allowable loss for capital gains tax purposes if —

  1. (a) it accrues to a person directly or indirectly in consequence of any arrangements, and
  2. (b) the main purpose or one of the main purposes of the arrangements is to secure a tax advantage.

(3) For the purposes of subsection (2), it will not be relevant—

  • whether or not the loss accrues at a time when there are no chargeable gains from which it could otherwise have been deducted, or
  • whether or not the tax advantage is secured for the person to whom the loss accrues or for any other person.

Relevant Date: Finance Act 2021