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DB 23C: Revenue account property: cost of some residential land reduced
or “Rule about reducing the cost of some residential land has been removed”
You could also call this:

“Rules for claiming losses when shares lose value”

When you buy a share in another company, sometimes the value of that share can go down. If this happens, you might lose money. This is called a share loss.

You can’t always claim this loss as a deduction on your taxes. There are some rules about when you can and can’t do this.

If the company you bought shares in (or another company it gave money to) had a tax loss, and you or a company in your group used that loss to reduce your taxes, you might not be able to claim your share loss as a deduction. This only applies if you used the tax loss before you had the share loss.

You can only claim a deduction for your share loss if it’s more than the amount of tax loss you used earlier. When figuring this out, you need to add up all the losses you’ve had from shares going down in value that you couldn’t claim before.

This rule is more important than the general permission to claim deductions. It means that even if you would normally be allowed to claim the deduction, you can’t if this rule applies to you.

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Next up: DB 25: Cancellation of shares held as revenue account property

or “Tax rules for cancelled company shares you hold for trading”
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Part D Deductions
Specific rules for expenditure types

DB 24Share losses

  1. This section applies when—

  2. a company (company A) acquires a share in another company (company B); and
    1. the share declines in value; and
      1. because of the decline in value, company A incurs a loss (the share loss), whether on a disposal of the share or a valuation of it under subpart ED (Valuation of excepted financial arrangements) or in any other way; and
        1. company B—
          1. itself uses the amount subscribed for the share; or
            1. uses it to fund directly or indirectly another company (company C); and
            2. company B or company C has a tax loss, in the calculation of which the amount used is taken into account; and
              1. company A, or a company that is part of the same group of companies as company A at any time in the income year in which company B or company C has the tax loss, offsets an amount for the tax loss under section IC 1 (Company A making tax loss available to company B); and
                1. the offset is in a tax year before the tax year that corresponds to the income year in which company A incurs the share loss.

                  1. Company A is denied a deduction for the share loss, except to the extent to which the share loss, as adjusted under subsection (3), is more than the amount offset under section IC 1, as adjusted under subsection (4).

                  2. When subsection (2) applies, the share loss is adjusted by adding every loss to which all the following apply:

                  3. company A incurs it as a result of the share’s decline in value or the decline in value of another share if the use of the amount subscribed for the other share is taken into account in calculating the tax loss; and
                    1. company A incurs it in an income year before the income year referred to in subsection (1)(g); and
                      1. company A has been denied a deduction for it by the operation of subsection (2).

                        1. The amount offset under section IC 1 includes every amount that company A, or a company that is part of the same group of companies as company A at any time in the income year in which company A has the tax loss, has offset for the tax loss under that section in a tax year before the tax year that corresponds to the income year in which the share loss is incurred.

                        2. This section overrides the general permission.

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