Answers · UK 2025/26
Can you carry forward capital losses to future years in the UK?
Yes -- capital losses that exceed your gains in a tax year carry forward indefinitely. They must first be used against gains in the same tax year before any carry-forward. Losses must be reported to HMRC within 4 years of the end of the tax year in which they arose.
Full answer
Capital losses in the UK can be carried forward to future tax years and set against capital gains in those years. How carry-forward works: - If your capital losses exceed your capital gains in a tax year, you have a net capital loss for that year. - The net loss automatically carries forward to the next tax year. - Carried-forward losses are set against gains in future years before the annual exempt amount (£3,000 for 2026/27). - There is no time limit -- losses carry forward indefinitely until fully used. Mandatory offset in the current year: - You cannot choose to carry a loss forward to preserve the annual exempt amount for the current year. - Losses must be set against gains arising in the same tax year first. - Only the net remaining loss (after offsetting against same-year gains) carries forward. Interaction with annual exempt amount: - Carried-forward losses are applied before the annual exempt amount. This means losses reduce your gain to the point where the exempt amount becomes effective. - Example: gain £15,000, brought-forward losses £10,000, annual exempt amount £3,000. Net taxable gain: £15,000 - £10,000 = £5,000, then subtract £3,000 exempt amount = £2,000 taxable. Reporting losses to HMRC: - You must report capital losses to HMRC to lock them in -- they are not automatically tracked. - Claim within 4 years of the end of the tax year in which the loss arose (e.g., a loss in 2022/23 must be claimed by 5 April 2027). - Report via Self Assessment (or write to HMRC if you do not normally file a return). Losses cannot be carried back: - Capital losses cannot be carried back to a prior tax year -- only carried forward. - Exception: in the year of death, unused losses from the last 3 years can be carried back against gains in those years.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.