½Û×ÓÊÓÆµ

Utilising capital losses

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance

Utilising capital losses

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
imgtext

Why capital losses are important

Capital losses are usually set against the capital gains that arise in the same year as the loss, reducing the total taxable gains for that year. Losses not used in this fashion are normally carried forward to be set against the next available gains.

However, in certain circumstances, those losses may be blocked, restricted, carried back to earlier tax years or possibly treated as if they were income tax losses (see below).

Where the taxpayer is subject to more than one rate of capital gains tax (CGT) in a single tax year, they can choose which gains should be reduced by their capital losses so that their tax liability is reduced to the minimum possible.

If a taxpayer makes a claim to defer chargeable gains for an earlier year, the use of losses may be disturbed, which can have a knock-on effect for several tax years.

Capital losses must be quantified and claimed before they can be used. See the Use of capital losses guidance note for how capital losses arise and how

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+â„¢
Powered by
  • 24 Mar 2025 13:20

Popular Articles

Taxation of dividend income

Taxation of dividend incomeIntroductionA dividend is a distribution of profit by a company to its shareholders.A dividend is not only a payment in cash. It can be the issue of new shares in exchange for forfeiting the right to a cash payment (a stock dividend). For more detail, see the Cash

14 Jul 2020 13:48 | Produced by Tolley Read more Read more

Transferable tax allowance (also known as the marriage allowance)

Transferable tax allowance (also known as the marriage allowance)What is the transferable tax allowance (marriage allowance)?From 6 April 2015, an individual can elect to transfer 10% of the personal allowance (£1,260) to the spouse or civil partner where neither party is a higher rate or additional

14 Jul 2020 13:52 | Produced by Tolley Read more Read more

Losses on shares set against income

Losses on shares set against incomeUsually, allowable capital losses can only be set against chargeable gains. If the losses are not fully utilised against gains in the year in which they arise, the excess is carried forward to use against future gains. See the Use of capital losses guidance note

14 Jul 2020 12:12 | Produced by Tolley Read more Read more