Tx notes fa22 Final

same year
. 
The amount of trading loss that can be o
ff
set against gains is the 
lower of:
๏
Loss remaining after income claim = the ‘relevant amount’.
๏
The ‘maximum amount’:
£
Total capital gains for year 
X
Less: Total capital losses for year 
(X)
Less: Total capital losses b/f 
(X)
––––
Maximum amount 
X
The trading loss is set against the current year net chargeable gains, before considering capital 
losses brought forward.
21/22
22/23
£
£
Trading Profit
20,000
Nil
Employment Income
60,000
60,000
80,000
60,000
Loss Relief
(70,000)
(50,000)
10,000
10,000
Personal Allowance
(12,570)
(12,570)
Taxable Income
-
-

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Note: Capital losses b/f are used in the calculation of the maximum amount, but may not actually be 
o
ff
set in the current year, as the trading loss is set o
ff
first followed by the AEA. If there are still net 
gains after the AEA then b/f capital losses will be utilised to reduce the net gains further.
The restriction of o
ff
set to a maximum amount of £50,000 or 25% of ATI does not apply to the o
ff
set 
against capital gains. 
 
Example 3 
For 2022/23 Kathy has net gains of £44,000 and a capital loss brought forward of £4,000 She has 
trading loss remaining of £24,000 after a claim against the total income of the tax year has been 
made.