Syllabus A2. Chargeable gains A2f. Disposals of shares and securities

A2fiv. Loss on sale of shares of unquoted company

Syllabus A2fiv)

Establish the relief for capital losses on shares in unquoted trading companies

Capital losses


Capital losses are normally carried forward and used to reduce future chargeable gains. 

However, there is another use of the capital losses. 

Relief against total income is available if – the loss arises on the disposal of unquoted trading company shares. 

With this claim, the capital loss can be set off against total income of the current year and previous year, this allows the loss to attract tax relief at the higher rates of 45%.


Drey subscribed for 5,000 shares in W Ltd., an unquoted trading company in August 2009 for £3 per share. 

On 1 December 2018, the company made major losses and that the shares were now valued at 10p per share. 

He has other income of £45,000. 

If he sells the shares at the current market value, how can he claim relief for his capital loss?

  • Solution

    Capital loss

    S.P. 5,000 * 0.1 = £500
    Cost  5,000 * £3 = (£15,000)
    Capital loss £14,500

    Claim against total income of the current year

    Total income £45,000
    Capital loss (£14,500)
    Total income £30,500