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HMRC internal manual

Capital Gains Manual

Individuals: losses: Relief for losses: example 3

Mr D carries forward losses of £10,500 from 2014-15.

In 2015-16 he has gains of £16,300 and losses of £3,500.

The annual exempt amount for 2015-16 is £11,100.

To compute the amount of chargeable gains assessable for 2015-16:-

  1. Deduct total losses of the year from total gains:
Total gains £16,300
Total losses (£3,500)
Net gains £12,800


    2. Deduct the annual exempt amount:

Net gains £12,800
Annual exempt amount £11,100


   3. You compare this figure with the total losses brought forward and set the smaller of the two against the net gain:

Amount remaining chargeable (as in 2 above) £1,700
Losses brought forward (£10,500)
You take the smaller figure of £1,700.  


    4. The position can then be summarised:

Chargeable gains   £16,300
Losses of the year (£3,500)  
Losses brought forward (£1,700) (£5,200)
Annual exempt amount   £11,100
Amount chargeable to Capital Gains Tax    


    5. You have used only part of the losses brought forward. The balance is carried forward:

Losses brought forward (£10,500)
Used in 2015-16 (£1,700)
Losses carried forward (£8,800)