How capital losses help
Who this guide is for: For investors who have disposed of assets at a loss and need to understand same-year offsets, carry-forward and share matching traps.
An allowable capital loss arises when you dispose of an asset for less than its allowable cost (subject to the Capital Gains Tax rules).
Losses reduce chargeable gains in the same tax year. Unused amounts can usually be carried forward. For the overall Capital Gains Tax workflow, see Capital Gains Tax Explained.
Same-year versus carried forward
- Step 1Same-year losses against gains
- Step 2Brought-forward losses if needed
- Step 3Annual Exempt Amount
- Step 4Tax any gain left
| Step | What happens |
|---|---|
| 1 | Offset current-year allowable losses against current-year gains (per HMRC ordering) |
| 2 | Apply brought-forward losses if gains remain |
| 3 | Apply the Annual Exempt Amount to remaining gains |
| 4 | Tax any gain still left at the relevant Capital Gains Tax rates |
Share matching traps
Buying back the same shares within 30 days can change which acquisition is matched to the sale. That may defer or restrict the loss you expected.
See how capital losses affect your taxable gain Use the Capital Gains Tax Calculator