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HMRC internal manual

Capital Gains Manual

Losses and annual exempt amounts: losses brought forward and losses of year of death

TCGA92/S3 (5)

Taxpayers are not required to restrict the amount of annual exemption to give relief for losses brought forward or carried back from the year of death. They must set off only the amount of losses needed to reduce the net gain to the level of the annual exempt amount. See examples in CG21543 (losses brought forward) and CG21551 (losses of year of death).