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Peter, Chartered Tax Advisor
Category: Finance
Satisfied Customers: 161
Experience:  Director at PDS Tax Limited
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In the Uk can I set off my capital losses against income tax

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In the Uk can I set off my capital losses against income tax when I have no capital gains? If so or when then how?

Hi, my name is ***** ***** I am a Chartered Tax Advisor.

You can offset capital losses against income if:

  • EIS income tax relief is attributable to them (see the Enterprise investment scheme tax relief guidance note), or
  • if EIS income tax relief is not attributable to them, they are shares in a qualifying unquoted trading company, which have been ‘subscribed’ for by the individual (i.e. issued by the company and not purchased from another individual).

Usually small trading companies will meet the conditions to be a qualifying trading company but please refer to the HMRC manual for further reading:

If you have any follow up questions, I am happy to help. Otherwise please consider a 5 star rating for my answer.

Kind regards, Peter

Customer: replied 2 years ago.
Thank you for your reply Peter. What are the options if capital losses relate to written off loans? I loaned 20k to a start up (which I also own) and is unlikely the loan will be paid back

There is no income tax loss relief for loans to trading companies - only equity subscriptions. As long as the capital loss is claimed via your tax return you can only carry forward the loss (indefinitely) until it can be relieved against gains.

Kind regards, Peter

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