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HMRC internal manual

Capital Gains Manual

Indexation: disposals 30/11/93+: transitional relief: indexation losses

Unused indexation losses from 1993-94 can be carried forward to 1994-95. But unused indexation losses, from either 1993-94 or 1994-95, cannot be carried forward beyond 1994-95. If, in the example at CG17831, there had been £3,800 of indexation losses in 1994-95 instead of £2,800, D’s chargeable gains for 1994-95 would have been reduced from £3,200 to Nil. But there would be no further relief available for the £600 excess of D’s indexation losses.

Other CG losses brought forward

The transitional relief described above is to be given before any allowable losses brought forward from an earlier year, see CG21500+, or - exceptionally - carried back from a later year under TCGA92/S62 on an individual’s death, see CG21550+. If, in the example at CG17831, there were losses of £4,000 brought forward from earlier years, say 1992-93:

  • none of these losses brought forward would be used in 1993-94;
  • £400 of the losses brought forward would be used in 1994-95 to cover the gains subject to CGT in that year.

The balance of the losses brought forward, £3,600, would be carried forward to later years.