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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
, see all updates

Losses: assessment

TCGA92/S1 (1), TCGA92/S2 (2), TCGA92/S3 (1), TCGA92/S4B (2)

An individual is assessable to Capital Gains Tax on his or her total chargeable gains for the year of assessment reduced by

  • allowable losses
  • the annual exempt amount.

For losses accruing in years up to and including 1995-96 there is no statutory mechanism for agreeing or for litigating the amount of a loss in the absence of gains from which the loss may be deducted, see CG15812.

Losses accruing in 1996-97 and later years are not allowable, and hence may not be deducted from chargeable gains, if they are not claimed in a quantified amount, see CG15813. For more about allowable losses see CG15800.

For the annual exempt amount see CG18000+.

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 and the annual exempt amount set off against those gains can vary. CG 18000 and CG21600+ explain that, subject to any rules which limit the gains from which losses may be deducted, losses and the annual exempt amount may be set against gains in the way that is most beneficial to the individual.