Capital Gains Tax (CGT) on the sale, gift or exchange of an asset

If you make a loss

You might make a loss when you dispose of an asset. This is known as an ‘allowable loss’ if a gain on the same transaction would be chargeable. You can deduct an allowable loss from any chargeable gains you make in the same tax year. This can include losses on the disposal of foreign property.

A loss on the disposal of development land can only be set against a gain on the disposal of development land.

Note

You might not have any chargeable gains in the same tax year you have made a loss. In this case, you will not have to include the loss in a return for that tax year.

Allowable losses that exceed the chargeable gain

You might have losses that you cannot use because:

  • they are less than gains made by you in the same tax year
  • you did not make any gains in the same tax year.

Carry forward capital losses

You will be able to carry forward the losses. This means you can use them against capital gain you make in later years. You need to include the carried-forward loss in your calculation of CGT for the later year. You also enter the carried-forward loss on the CGT return form for the later year.

Transfer capital losses to spouse or civil partner

You can use the balance against your spouse or civil partner’s gains.

You, and your spouse or civil partner, can make an application that this should not apply. This application must be made on or before 1 April in the following year. Send the request:

Special provisions for capital losses following a death

Losses cannot be set against gains for earlier years except where those losses are made in the year of death.

In the year a person dies, losses made by them might not be able to be set against gains in the same year. These losses can be deducted from the gains of the previous three years.

Next: Selling or disposing of shares