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HMRC internal manual

Capital Gains Manual

Losses: to be deducted or carried forward

TCGA92/S2 (2) (3), TCGA92/S3

Allowable losses must be deducted

  • as far as possible from chargeable gains accruing in the same year of assessment,


  • any balance must be carried forward without time limit and deducted from chargeable gains accruing in the earliest later year. Losses brought forward are deducted after losses accruing in the year of assessment and cannot reduce the net chargeable gains to below the annual exempt amount. Any losses which thus cannot be deducted remain available for deduction in later years.

Relief for losses may not be given

  • more than once in respect of the same loss; or
  • if relief has been or may be given in respect of the loss against profits or income under the Income Tax Acts, see CG15831;
  • for losses carried back - but see CG15811.

For further detail see CG21500+.

For 2010 - 11 and subsequent years gains accruing to a person in a tax year may be chargeable to capital gains tax at different rates. Thus the tax effect of losses set off against those gains can vary. Subject to any rules which may limit the gains from which losses may be deducted, losses may be set against gains in the way that is most beneficial to the taxpayer. See CG21600+.