The rules in this article apply only where the loss buying rules (¶Ù2.402–D2.404) do not apply. They normally only apply in cases where there is no arrangement for avoiding tax, eg on a merger or takeover.
Relief for losses is available where two or more companies become members of a group (Group B) at the same time and they were all members of another group (Group A) immediately before they joined Group B1.
Where the relief applies, the basic set-off restrictions (see D2.425) and the relief for trade assets (see D2.426) are modified as set out below. These modifications preserve to some extent the ability of the former members of the first group, whilst members of that group, to set capital losses against capital gains by transfer of assets between them within the first group.
In all cases where this relief operates, it is subject to possible further restriction under the rules which apply where there are two or more connected groups in relation to a
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