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With regards to the election to use unused losses after reducing curent/previous year profits against CGT, does this apply to relief above the cap unable to be used in any of the years but still not reducing profits to zero? For example if the cap is £50,000, loss is £100,00 and the previous year taxable profits were £75,000, there still remain £25,000 unrelieved, can this amount reduce CGT even though the total profits weren’t reduced to zero?
Firstly remember that S.64 is against total INCOME not profits. The £50,000 cap also only applies in respect of non trading income – see revision notes chapter 7 section 4(c) and illustration Louise Serr that follows.
If a trading loss of 100,000 arose – as you suggest – and for the year of the S.64 claim a 50,000 cap did apply then there would still be a remaining loss of 50,000 to form the basis of the extended claim against the chargeable gains of that tax year.
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