Law guide: Business start-up

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Tax relief for capital loss

Tax relief for capital loss

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.

You have 4 years from the end of the tax year in which the loss was made to claim relief.

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