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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Annual exempt amount: example

The exempt amount for the year 1998-99 is £6,800.

B has gains of £8,000 and losses of £3,500 for the same year.

The computation is

Gains 8,000
Losses 3,500
Taxable amount which is covered by the exemption 4,500

which is covered by the exemption

The whole of the losses for the year must be deducted from the gains, even though thisreduces the net gains below the amount of the annual exemption.

In theory taper relief, for 1998-99 onwards, should have been calculated before deductingthe annual exempt amount, but clearly there is no need to do this as there is noliability. The computation is identical for 1997-98.