Taper relief set off

Taper relief set off

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I have capital losses from previous years. This year I have a capital gain that is subject to business assett taper relief.

Can I set off the gain against my losses, having allowed for taper relief, or must I set off the gain excluding taper relief?
Richard Fletcher

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By AnonymousUser
22nd Jul 2005 13:07

Calculation formulation
This formulation is very useful but is the formula right and perhaps I have not stated the question clearly enough? And as you also point out I should read the instructions!

Using your notation;

L is previous years losses carried forward
G is this years Chargeable Gain
TR is the taper rate i.e. (100-Taper Relief)
(and in my case, L is much larger than G)

My issue was that should I calculate the carried forward losses to next year as being either:

Losses carried forward to next year (L2)as L2=L-G

or is L2=L-G*TR

I fear the former.

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By barryhallam
22nd Jul 2005 14:10

Put some figures on it....
.......

Suppose you have losses brought forward of £100,000 and capital gains in the year (which attract full businesss taper) of £50,000.

You utilise sufficient losses to bring the gross gains down to the Annual Exemption (£8,500 this year).

So you utilise £41,500 of your losses leaving £58,500 to carry forward.

The gains of £8,500 attract 75% taper leaving only £2,125 to be covered by the exemption. The balance of the exemption of £6,375 is lost.

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By User deleted
18th Jul 2005 20:58

Look at the CGT pages of the return
These make it clear that

where
G is Chargeable Gain
L is allowable losses
TR is the taper rate i.e. (100-Taper Relief)

Tapered gain = (G-L)*TR

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