Answers · UK 2025/26
How do capital losses work and can I carry them forward against future gains?
Yes. Capital losses first reduce gains in the same tax year, then any unused loss is carried forward indefinitely against future gains. To carry a loss forward you must claim it, normally within four years of the end of the tax year in which it arose.
Full answer
Capital losses are a valuable but easily wasted relief. In the year a loss arises it is set against gains of the same year before the GBP 3,000 annual exempt amount is applied, which means current-year losses cannot be 'saved' if you have gains, even if that wastes the exemption. Any loss left over is carried forward and, in later years, is used only after the annual exempt amount, so you keep the GBP 3,000 tax-free band. Crucially, losses are only available if claimed, and the deadline is generally four years from the end of the tax year of the loss. Worked example: in 2026/27 you realise a GBP 10,000 gain on one fund and a GBP 4,000 loss on another. The loss must offset the gain first, leaving GBP 6,000; the GBP 3,000 exemption then reduces this to GBP 3,000 taxable, costing GBP 720 at the 24% higher rate. Now suppose a different year: you carry forward a GBP 5,000 loss and later make a GBP 7,000 gain. You apply the GBP 3,000 exemption first, leaving GBP 4,000, then use GBP 4,000 of the brought-forward loss to reduce it to nil, carrying GBP 1,000 of loss onward. Losses on crypto and shares are pooled the same way; a negligible value claim can crystallise a loss on a now-worthless holding. Use the Capital Gains Tax calculator to test scenarios, and report losses through Self Assessment per gov.uk.
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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.