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HMRC internal manual

Venture Capital Schemes Manual

Share Loss Relief: individual and corporate claimants: individual claimants: interaction with CGT

If Share Loss Relief is not obtained in respect of all or part of a loss which is allowable for capital gains tax purposes, the balance remains available as an allowable capital loss to be deducted from chargeable gains in the year of loss or later years. This is provided for by ITA07/S133(5).

If an allowable loss has been set against chargeable gains and Share Loss Relief is then claimed in respect of the same loss, TCGA92/S125A(3)(b) allows all necessary adjustments to be made to the capital gains tax charge in order to withdraw the effect of the allowable loss to the extent that it has been ‘used’ for Share Loss Relief.

Similarly, if Share Loss Relief is not obtained in respect of an allowable loss, adjustments to a capital gains tax charge may be made in order effectively to allow a further reduction of chargeable gains on account of the loss which is no longer ‘used’ for Share Loss Relief. This is permitted by TCGA92/S125A(3)(a).

There is more detailed guidance at VCM75290.