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If an individual sells a chargeable asset and makes an allowable loss, how can this be relieved?

First of all, since the simplification of capital gains tax from 6 April 2008, the proforma to calculate a loss is the same as the proforma to calculate a gain. See the Basic calculation principles of capital gains tax guidance note for more details. Broadly, a loss arises if net proceeds after incidental costs of sale are less than the total of the acquisition costs plus any allowable enhancement expenditure.

Usually, allowable capital losses are set against chargeable gains, reducing the amount of the gain.

However, where a loss has been made on unquoted shares, the loss may be able to be set against income instead of gains. This is usually a more tax efficient use of the loss, as income is taxed at higher rates than capital gains. See the Losses on shares set against income guidance note for details of the conditions which must be met.

Also, certain unused trading, post-cessation trading or employment income tax losses