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HMRC internal manual

Capital Gains Manual

Individuals: losses: Losses: set off from 2010-11 onwards: limitations on loss set-off


For 2010-11 onwards the general rule is that losses may be set off against gains in whatever way is most beneficial in terms of reducing the Capital Gains Tax payable, see CG21600.  However, TCGA92/S4B(3) makes it clear that this general rule does not overrule existing legislation that limits the gains from which allowable losses may be deducted.

Examples of such provisions include

  • where a qualifying business disposal that qualifies for Entrepreneurs’ Relief includes both gains and losses, see CG64125,
  • where the remittance basis applies and there has been an election for foreign losses to remain allowable losses, see CG25330,
  • clogged losses resulting from a disposal to a connected person, see CG14561,
  • the disposal of an asset by a person who acquired the asset from trustees by becoming absolutely entitled to it as against the trustees together with the trustees’ loss on their disposal of the asset see CG37205,
  • where there is a terminal loss on a mineral lease and it is set off against gains arising from the receipt of mineral royalties, see CG71751.

The example at CG21605 shows how losses that form part of a qualifying business disposal for Entrepreneurs’ Relief are set off against gains in that qualifying disposal.

The example at CG21615 shows how the limitation for clogged losses applies.