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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Losses and annual exempt amounts

Each year an individual can make gains up to a certain limit without being liable to Capital Gains Tax. That limit is the annual exempt amount. There is more information about the annual exempt amount at CG18000+.

You must compute the individual’s net chargeable gains before you deduct the annual exempt amount.

You must deduct TOTAL losses of the year from the gains. It is not possible for an individual to deduct only PART of the losses of the year and then cover the remaining gains by the annual exempt amount. The losses of the year may therefore restrict the amount of annual exemption available.