Taxes Consolidation Act 1997 Schedule 18A paragraph 2

Calculation of pre-entry loss by reference to market value

Paragraph 2 of Schedule 18A sets out how to calculate the pre-entry proportion of an allowable loss arising on a company's disposal of a pre-entry asset, by reference to the asset's market value at the time of group entry.

• Where an allowable loss arises on a company's disposal of a pre-entry asset, the pre-entry proportion of that loss must be calculated.
• The pre-entry proportion is the lower of two amounts: the hypothetical loss on a disposal at market value at the time of group entry, or the actual allowable loss on the disposal.
• Allowable loss means the loss after applying indexation relief (section 556).
• Market value is the price the asset would fetch on a sale in the open market (section 548).