Arrangements under which a group of companies with capital gains was acquired by a group with brought forward capital losses to satisfy an exemption from anti-avoidance provisions concerning pre-entry losses were successful, even if a purposive application of the legislation was applied.  

The appellant company (ANO) was a party to arrangements involving transactions which were intended to enable the capital gains of companies in one group of companies (‘O&H group’, whose holding company was O&H) to be offset against allowable losses of companies in another group of companies (‘ANO group’). 

If the O&H group (the gains group) acquired the ANO group (the loss group), the pre-entry loss rules in TCGA 1992, Sch 7A would have applied to restrict the use of the ANO group’s losses; but if the ANO group acquired the O&H group, Sch 7A