Usually, if you sell an asset for less than you paid for it you would make a capital loss. As a general rule if the asset would have been liable to CGT had a gain taken place then the loss should be an allowable deduction.
If an individual realises an allowable loss in the part of the tax year before his or her death, those losses must be set first against any chargeable gains accruing in that period. This applies even if it reduces the net chargeable gains below the annual exempt amount for that year.
If there is an excess of allowable losses after this set off, those losses may be carried back and set off against gains accruing in the three tax years before the tax year of death.
Any losses that are not set against gains accruing before death are lost. They cannot be used by the personal representatives or the legatees.
The legislation does not provide any specific procedures or time limits for dealing with claims to carry back losses of the year of death. The normal procedures and time limits relating to claims will therefore apply.
