Share Loss Relief allows capital losses which arise in respect of shares to be set against a person’s income providing certain conditions are met. Without the provisions which are now at Part 4, Chapter 6 ITA 2007 and Part 4, Chapter 5 CTA 2010 allowable losses computed under TCGA 1992 could only be relieved by setting them against chargeable gains on other assets. Relief against income may be more valuable to the investor than relief against capital gains, and the purpose of Share Loss Relief is to encourage entrepreneurs to invest in unquoted trading companies. Share Loss Relief is available both to individuals (who pay income tax) and to companies (which generally pay corporation tax), although only investment companies are eligible to claim it.
This guide provides an overview for companies and potential investors. It does not cover all the detailed rules, so companies and investors should not proceed solely on the basis of the information in it, and should consider seeking professional advice.