Commentary

C1.501A Claiming CGT losses

Capital gains tax
Capital gains tax | Commentary

C1.501A Claiming CGT losses

Capital gains tax | Commentary

C1.501A Claiming CGT losses

Any capital loss has to be notified1 to HMRC as if it were a claim which, has to be submitted within four years after the end of the year of assessment to which it relates for capital gains tax and four years after the end of the accounting period for corporation tax2.

A current year loss which has been claimed must be set off against current year gains before relief can be given for any previous losses brought forward3 (see C1.502). Where a person has gains taxable at more than one tax rate (see C1.107) the losses may be deducted from gains, and the annual exempt amount may be used in respect of those gains, in the most beneficial way to limit the tax charge. This is subject to any provision which limits the gains from which allowable losses may be deducted4 (see C3.1802).

Following the case of Jelley5 (see C2.1008ZA) HMRC accepted that it was possible for taxpayers to claim to increase capital losses, subject to the normal time limit set out in TMA 1970, s 42. In that case it was held by the Court of Appeal that the CGT base cost of shares acquired by exercising an employee share option was the market value of the shares at the time the option

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