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HMRC internal manual

Capital Gains Manual

Administration: introduction: losses

It is important to note that, for accounting periods before the introduction of Self Assessment, unlike trading losses, there is no statutory mechanism for agreeing capital losses other than to the extent that there are assessed gains to set them against (Tod v South Essex Motors (Basildon) Ltd 60TC598). Claims under TCGA92/S253 (losses on loans to traders, see CG65900+ for guidance on this section) forms an exception to this general rule.

See CTM04500 onwards for the set-off of trading losses.

Note: Additional rules placing a restriction on a company’s allowable losses were enacted in FA 2006. See CG47020+ for guidance on the rules which apply to losses which accrue on or after 5 December 2005.