The Loss Relief Extension To Capital Gains
Many people are unaware that if a trading loss is claimed against other income, either for the current or previous year, then by election this can be extended to capital gains, resulting in a further refund of taxes.
This can be of considerable benefit depending on the circumstances.
The Loss Relief Extension:
John makes a loss in 2011/12 of £50,000.
His income in the same year from other sources is £30,000 and he has chargeable gains (after deducting the annual exemption) of £20,000.
His profit for 2012/13 is likely to be £10,000.
Clearly it is advantageous in this situation to relieve the loss sideways against and extend the claim to cover the capital gains.
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