Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
, see all updates

Relief for losses: example

Mrs B’s chargeable gains and allowable losses for the year 2009-10 are agreed as follows.

  Gain on sale of land £9,000
     
  Loss on disposal of shares (£4,500)
  Gain on sale of painting £15,750
  Loss on sale of cottage (£17,900)
     
A) Add together all the gains:  
     
  Gain on sale of land £9,500
  Gain on sale of painting £15,750
     
  Total gains £25,250
     
B) Add together all the losses:  
     
  Loss on disposal of shares (£4,500)
  Loss on sale of cottage (£17,900)
     
  Total losses (£22,400)
     
C) Deduct total losses from total gains  
     
  Total gains £25,250
  Total losses (£22,400)
     
  Net gains £2,850

The annual exempt amount for the year is £10,100. The net gain is less than the annual exempt amount and so no tax is chargeable for the year.

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. This is of no relevance where, as in the above example, there is no amount on which capital gains tax finally falls to be charged. Subject to any rules which may 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 taxpayer. See CG21600+ for examples showing the deduction of losses and the annual exempt amount where for 2010 - 11 and later years capital gains tax is payable.