It was announced in the Budget on 29 October 2018 that relief for carried forward capital losses will be brought into line with relief for carried forward income losses from 1 April 2020. From that date capital losses carried forward will only be able to be offset in a later accounting period against 50% of any capital gains arising in excess of £5m, with a single £5m ‘deductions allowance’ per group against which carried forward losses (both income and/or capital) can be set. Capital losses arising in-year will continue to be available for 100% offset against in-year chargeable gains. Transitional arrangements will apply to accounting periods straddling 1 April 2020 to deem “pre” and “post” periods for these purposes only. Life assurance companies (in respect of the policyholders’ share of BLAGAB gains) and Oil and Gas companies with ring-fenced gains will be exempted from the restriction.
