Taxation of Chargeable Gains Act 1992 section 261C

Meaning of "the maximum amount" for purposes of section 261B

Section 261C defines "the maximum amount" that can be treated as a capital gains tax loss when a person converts a trading loss (or similar loss) into a CGT loss under section 261B.

• The maximum amount is the person's net chargeable gains for the tax year, calculated before deducting the annual exempt amount but after offsetting any capital losses
• The calculation must ignore the annual exempt amount and any relief already given under section 261B itself
• Events that reduce the CGT liability after the relevant loss figure has become final (i.e. can no longer be varied on appeal or by court order) must also be disregarded
• This cap ensures that a person cannot convert more trading loss into a CGT loss than there are actual chargeable gains available to absorb it