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Tax relief for capital loss

Tax relief for capital loss

Contents

Tax relief for capital loss

If you suffer a loss on the sale of an asset (a capital loss), you can set this loss off against any profits made on the sale of other assets (capital profits) in the same tax year. You may also be able to set this loss off against capital profits made in future years.

If you carry the loss forward to the next tax year, you can set it against capital profits to bring them down to the level of your Annual Exempt Amount (see Capital Gains Tax for more information).

Claiming the loss

You must tell HM Revenue & Customs (HMRC) about the loss by claiming it on your Self Assessment tax return (including your calculations) within specified time limits. If you don't normally file a Self Assessment tax return, you can tell HMRC of the loss and your calculation by letter.

For losses made before 1 April 2012:

  • if you submitted a Self Assessment tax return for the year of the loss, you must claim the loss within 4 years from the end of that tax year; or
  • if you didn't submit a Self Assessment tax return in the year of the loss, you have 5 years from the 31 January following the tax year of the loss to claim.

For losses made on or after 1 April 2012, you have 4 years from the end of the tax year in which the loss was made to claim relief.