Losses on shares set against income
Personal Tax
Guidance
Usually, allowable capital losses can only be set against chargeable gains. If the losses are not fully utilised against gains in the year in which they arise, the excess is carried forward to use against future gains. See the Use of capital losses guidance note for further details.
This rule can be broken if the loss arises on certain shares. If the shares meet the conditions, the taxpayer can choose whether to set the losses against:
- 鈥�
their chargeable gains, or
- 鈥�
their income for:
- 鈼�
that year
- 鈼�
the previous year, or
- 鈼�
both years
- 鈼�
This may also be referred to in practice as 鈥榮hare loss relief鈥�.
Given the lower rates of capital gains tax compared with the rates of income tax, it is more tax effective to set the losses against income if possible. Any loss that cannot be or is not utilised against income is a capital loss that can be relieved under the normal rules. See the Use of capital losses guidance note.
This
Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+鈩�Related documents:
Related documents:
Popular Articles
Personal Tax
Foreign tax relief
Foreign tax reliefIncome and gains may be taxable in more than one country. The UK has three ways of ensuring that the individual does not bear a double burden:1)treaty tax relief may reduce or eliminate the double tax2)if there is no treaty, the individual can claim 鈥榰nilateral鈥� relief by deducting
Tax Returns
Corporation Tax
Taxation of loan relationships
Taxation of loan relationshipsThe vast majority of companies will have loan relationships and so will need to consider how they are taxed under the loan relationship rules. There are also specific provisions dealing with relevant non-lending relationships and other deemed loan relationships.
Corporation Tax
Temporary differences
Temporary differencesCalculation of temporary differencesThe temporary difference arising in respect of an asset or liability is calculated by comparing the carrying value of that asset or liability with its tax base.IAS 12 uses the concept of taxable or deductible temporary differences. Whether a
