Taxation of Chargeable Gains Act 1992 section 261D

Treating excess post-cessation trade or property relief as CGT loss

Section 261D allows individuals who have claimed post-cessation trade or property relief to convert any excess amount that cannot be used against income into an allowable capital gains tax loss, subject to a cap.

• Where post-cessation trade or property relief exceeds the taxpayer's net income (or the taxpayer has no income at all), the unused portion can be claimed as an allowable CGT loss for the corresponding tax year.
• The amount that can be treated as a CGT loss is capped at the lower of the unused relief and the taxpayer's net chargeable gains for the year (calculated before deducting the annual exempt amount, brought-forward losses, or trade loss relief under section 261B).
• Once the claim is made, the amount converted into a CGT loss is no longer available for income tax relief, preventing a double benefit.
• The claim must be submitted no later than the first anniversary of the normal self-assessment filing date for the relevant tax year.