Commentary

C1.501 Allowable CGT losses

Capital gains tax
Capital gains tax | Commentary

C1.501 Allowable CGT losses

Capital gains tax | Commentary

Division C1.5     Losses

For updates affecting this Division please see Part C0 Updates

CGT losses

C1.501 Allowable CGT losses

Where a loss arises on the disposal of assets, it is an allowable loss if, on the assumption that a gain had arisen, there would have been a chargeable gain1.

In general, losses arising on the disposal of assets are to be computed in the same way as gains2, bearing in mind that indexation allowance (where relevant, see C2.301) may neither create nor increase a loss3. In the case of non-wasting chattels disposed of for £6,000 or less, the allowable loss is computed as if consideration for the disposal had been that £6,000 (see C1.509). The amount of any allowable loss arising is restricted where the allowable expenditure in respect of an asset qualified for capital allowances (see C1.507), or, in the case of a lease of land, for relief from tax on a UK property business (see C2.1219).

Deductions for inheritance tax on a gift (see C2.226), or for consideration for a sublease granted from a short lease treated as a receipt of a UK property business4, cannot give rise to an allowable loss.

The amount of an allowable loss (or a chargeable gain) falls to be adjusted if there has been a scheme or arrangement for the value of the asset to be reduced and for the conferring of a tax-free benefit5. In the case of the disposal of shares in a company by another member of the same group, the amount of

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