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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
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Annual exempt amount: taxable amount: losses 1998-99 onwards

In the normal case the taxable amount, see CG18031, is calculated as follows. The relevant legislation can be found in TCGA92/S3(5), TCGA92/S3(5A) and TCGA92/S3(5B) and TCGA92/S62(2B).

  • Calculate the gross amount of chargeable gains before losses, but after all other deductions and reliefs have been applied in computing the chargeable gains.
  • Deduct any allowable losses for the year, even if this reduces the net gains below the annual exempt amount.
  • Deduct any losses brought forward but only to the extent required to reduce the net gains to the annual exempt amount.
  • Where the taxpayer is an individual who is now deceased, deduct any losses accruing to him or her for the year of death which can be carried back, see CG30430, but only to the extent required to reduce the net gains to the annual exempt amount, after applying the previous bullet.
  • The calculation was modified to take account of taper relief until 2007/2008.

The calculation is illustrated by the examples at CG18201 and CG18202.