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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Relief for losses: losses in year of death

Mrs E dies in 2009-10. Her disposals in that year before her death have produced gains of £8,500 and losses of £20,000.

Amounts chargeable to Capital Gains Tax on Mrs E before the deduction of losses from the year of death are as follows-

2006-07 £6,800
   
2007-08 £3,500
2008-09 £7,400

These figures are after deduction of the annual exempt amount (see Stage 4 of the example in CG21543).

EXAMPLE

1) Deduct total losses of the year from total gains:

2009-10  
   
  £
Total gains £8,500
Total losses (£20,000)
   
Losses available to carry back (£11,500)

There are no gains chargeable to Capital Gains Tax for 2009-10.

2) Set the balance of losses against gains of the three preceding years, taking later years before earlier years:

2008-09    
     
  £ £
Net chargeable gains   7,400
Losses brought back (11,500)  
Allowed 2008-09 (7,400) (7,400)
     
Losses carried back (4,100)  
Amount chargeable 2008-09    
2007-08    
     
Net Chargeable gains   3,500
Losses brought back (4,100)  
Allowed 2007-08 (3,500) (3,500)
     
Losses carried back (600)  
Amount chargeable 2007-08    
2006-07    
     
Net chargeable gains   6,800
Losses brought back (600)  
Allowed 2006-07 (600) (600)
     
Amount chargeable 2006-07   6,200