Relief for losses: summary of rules
TCGA92/S2 (2), TCGA92/S3, TCGA92/S4B (2)
You deduct from the total amount of chargeable gains in the year of assessment
- any allowable losses accruing in that year of assessment even if the net chargeable gains thus fall below the annual exempt amount;
- any unused allowable losses brought forward from earlier years (see CG15812 and CG15813), but not so as to take the net chargeable gains below the annual exempt amount;
- excess losses carried back from the year of assessment in which the taxpayer dies but not so as to take the net chargeable gains below the annual exempt amount.
Capital Gains Tax is then charged on the excess of the net chargeable gains over the annual exempt amount, see CG18000+.
For particular losses which may, exceptionally, be carried back from a later year of assessment, see CG15811.
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+.