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HMRC internal manual

Capital Gains Manual

Absolute entitlement: losses of trustees: self assessment

The general principle under TCGA92/ S16 (2A), is that a loss of 1996-97 onwards is not an allowable loss unless notice has been given to an officer of the Board, see CG15813. The notice is treated as a claim to relief and is subject to the normal provisions relating to claims to relief. Therefore wherever absolute entitlement occurs after 5 April 1996 no losses accruing after that date can be transmitted to the beneficiary until the trustees have made the appropriate claim, generally on his or her return for that year.

If they have not made such a claim there is no basis on which the beneficiary can show a transferred allowable loss on his return, unless it accrued before 6 April 1996. His return is therefore incorrect.

Unless small amounts only are involved, it is important that any claim by a beneficiary that TCGA92/S71 (2) applies should be checked with the trust district.