Carrying forward capital losses

tg99

Say in the tax year you make gross capital gains of £10k and a gross capital loss of £1k. Do you have to use the £1k loss against your gains in that tax year (and thus not gain any benefit from it since the £10k gross gains are already within the exemption limit) or can you carry it forward to use in a future tax year when you have gross gains above the exemption limit? I had thought it was the former but HMRC person I spoke to said it was the latter (but thought worth asking on here too given what I've been told in the past by HMRC has not always proved entirely correct).

System

I think it is the former.

EdSwippet

tg99 wrote: »

Say in the tax year you make gross capital gains of £10k and a gross capital loss of £1k. Do you have to use the £1k loss against your gains in that tax year (and thus not gain any benefit from it since the £10k gross gains are already within the exemption limit)...?

That one. From the horse's mouth:

Using losses to reduce your gain
When you report a loss, the amount is deducted from the gains you made in the same tax year.

If your total taxable gain is still above the tax-free allowance, you can deduct unused losses from previous tax years. If they reduce your gain to the tax-free allowance, you can carry forward the remaining losses to a future tax year.

tg99

Person I spoke to at HMRC was an 'inspector' as was asking in the context of EIS shares to get confirmation on using any loss against capital gains rather than income if the circumstances so dictated. Hence when he said that any EIS capital loss could be carried forward to use against gains in future years even if in the year the loss arose I had gross gains within the exemption limit, I asked him to confirm this also applied to 'normal' capital losses (e.g. publicly traded shares, property etc) rather than just EIS ones and he said they did.