Taxation of Chargeable Gains Act 1992 section 125A

Effect of share loss relief

Section 125A sets out the consequences when share loss relief is claimed against income, ensuring that the same loss cannot also be used as a capital gains deduction, and requiring any necessary tax adjustments to be made.

• Where share loss relief is obtained under the income tax or corporation tax rules, the same loss (or the part relieved) cannot also be deducted against chargeable gains under TCGA 1992.
• When a share loss relief claim is made, the anti-avoidance rule in section 30 is widened so that all benefits received in connection with the disposal — not just tax-free benefits — are taken into account in computing the loss.
• HMRC must make all necessary adjustments to corporation tax on chargeable gains or capital gains tax, whether by raising assessments or issuing repayments, to reflect the outcome of a share loss relief claim.
• These adjustments apply both where share loss relief is successfully obtained and where a claim is made but relief is not obtained in respect of the whole or part of the loss.