Section 1E: Losses deductible only when within scope of tax etc

Taxation of Chargeable Gains Act 1992 · 1992 c. 12View on legislation.gov.uk

Part 1: Capital gains tax and corporation tax on chargeable gains — Chapter 1: Capital gains tax

A loss is not an allowable loss if it accrues in a tax year at a time when, had a gain accrued instead, the gain would not have been chargeable to capital gains tax under this Act for the tax year (and see also sections 16(2) and 16A).

In addition, the only allowable losses that qualify for deduction from chargeable gains under section 1A(3) (non-UK residents) are those accruing to the person on disposals of assets within that subsection.

An allowable loss counts for the purposes of subsection (2) even if it accrues in a tax year in which the person was UK resident.

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If—

amounts (or elements of amounts) treated as accruing to an individual as a result of section 86 relate to different settlements, and
the deduction of allowable losses does not reduce the amounts or elements to nil,

the deduction applicable to each amount is the proportion that the amount concerned bears to the total of the amounts.

The deduction of allowable losses also has effect subject to paragraph 5 of Schedule D1 (relief for new residents on foreign gains).

For the only case in which an allowable loss accruing in a tax year may be carried back to an earlier tax year, see section 62 (death).

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