07: Trading losses

Normally if you make a loss in your trade, you can set it against other income of the same or the previous year or carry it forward against future trading profits. However, it is also possible to set trading losses against capital gains arising in the same year as the loss or the previous year, once income of those years has been relieved.

The trading loss is set against gains before taper relief, so if you set losses against gains that qualify for 75% taper relief, you limit the rate at which you obtain relief to a maximum of 10%. It may be better to wait for the trading losses to be relieved against future trading income rather than claim a smaller amount of immediate relief.