Share Loss Relief 2026/27 — Offset Losses Against Capital Gains

Selling shares at a loss is never pleasant, but an allowable loss can reduce taxable capital gains. You must claim the loss to use it; HMRC allows a claim up to four years after the end of the tax year of disposal. For 2026/27 the key figures are the £3,000 annual exempt amount, the 30-day share-matching rule and the distinction between ordinary capital-loss treatment and EIS/SEIS share loss relief. Model your own position with the CGT Calculator→.

This guide covers same-year offsetting, carry forward, the Section 104 pool, the 30-day trap, negligible value claims and the special EIS and SEIS rules.

How the Relief Works

Because claimed losses are applied before the £3,000 exempt amount, they only save CGT if the resulting gains exceed the allowance. With £5,000 of gains and £3,000 of losses, the net gain is £2,000 — inside the allowance. With £15,000 of gains and £3,000 of losses, the taxable gain falls from £12,000 to £9,000; the saving depends on the applicable 18% or 24% rate and the unused basic-rate band.

Carry Forward

Losses that exceed the year's gains carry forward indefinitely — but they must be used as soon as possible once gains arise. Carried-forward losses are deducted before the annual exempt amount, so if a future year's gains are below £3,000, the losses are wasted against tax-free gains. That creates a planning opportunity: if you hold a large carried-forward loss, it can be worth realising additional gains in a year to use it, because otherwise it simply evaporates against the allowance.

The 30-Day Bed and Breakfasting Rule

Selling shares at a loss and acquiring the same class of shares in the following 30 days invokes HMRC’s matching rules. The loss is not simply erased: the disposal is matched with the later acquisition, so the loss is generally deferred into the cost calculation for that matched holding. Same-day acquisitions are matched first, then acquisitions in the following 30 days, then the Section 104 pool. Different shares are not automatically identical securities, but “same sector” is not the legal test.

The Section 104 Pool

When you hold shares bought at different times and prices, HMRC matches disposals in a set order: same-day acquisitions first, then shares bought within the following 30 days, then the Section 104 pool — all shares of the same class in the same company averaged into a single holding. Buying 500 shares at £10, 300 at £12 and 200 at £8 creates a pool of 1,000 shares at an average cost of £10.20. Selling 400 at £9 gives proceeds of £3,600 against a deducted cost of £4,080 — a loss of £480, computed on the average, not on any specific purchase.

EIS and SEIS Loss Relief

Losses on qualifying EIS and SEIS shares can, where the statutory conditions are met, be elected against income rather than only capital gains. The loss amount is reduced by Income Tax relief already received. Priya invested £20,000 in an EIS company, received £6,000 of EIS relief at 30%, and later makes an allowable £14,000 loss. At a 40% marginal rate, a claim against income could produce up to £5,600 of relief, subject to the claim, loss-capacity, year and all scheme conditions. Do not use a generic three-year holding rule as the test for every loss claim; check the current HS286 and EIS/SEIS rules.

Negligible Value and Reporting

If shares become virtually worthless but you have not sold them, a negligible value claim can treat them as disposed of and immediately reacquired at negligible value, crystallising a loss. An earlier effective date may be available within the statutory window if the conditions are met; this is not an automatic two-year choice and you must still own the asset when claiming. The claim may be made in writing or on the return. Losses can generally be claimed up to four years after the end of the disposal tax year; report them through the applicable Self Assessment pages, with EIS/SEIS income-loss elections supported by the current HS286 and scheme records.

Rights Issues, Bonus Issues and Capital Distributions

Losses do not only arise from straightforward sales. If you do not take up a rights issue and sell the nil-paid rights for less than their deemed value, that loss is allowable. A bonus issue creates no loss — the new shares dilute the average cost of the holding instead. When a company returns capital — a liquidation distribution, a special dividend classed as capital, or a scheme of arrangement — any shortfall between the distribution and your acquisition cost is an allowable loss, and the timing of the distribution fixes the year in which it is claimed. In a share-for-share takeover the disposal is at no gain or no loss, your original cost transfers to the replacement shares, and a loss only appears when you sell those.

The matching rules interact with these events. Because the Section 104 pool averages the cost across all holdings, a rights or bonus issue can adjust the pool and the loss on a later sale is computed against the resulting cost. Where a company is in administration and the shares are worthless, a negligible value claim may be available if the statutory conditions and effective-date limits are met. Keep the offer documents, company announcements and broker statements for every corporate action — they are the evidence needed when a loss depends on a rights or capital event rather than a simple trade.

Build the Loss File Before You Reinvest

Before claiming a loss, export the broker contract notes, holding history, corporate-action notices, dividend or capital-distribution statements and any EIS or SEIS certificates. Record the disposal date, proceeds, fees, number and class of securities, acquisition transactions and any purchases made on the same day or in the following 30 days. A portfolio app’s cost basis can be a useful cross-check, but it may not apply the UK matching order or include transfers between platforms.

If you plan to reinvest, decide whether the new purchase is the same class of security before placing the order. Buying an economically similar fund is not automatically the same security, while a different ticker can still represent the same class or corporate holding. Do not assume that waiting 31 days solves every issue: section 104 pooling, spouse transfers, ISA transactions, corporate actions and EIS or SEIS conditions can change the result.

At year end, reconcile the claimed loss to SA108, the gains schedule and the loss carried forward. Show which losses were used, which remain available and whether the annual exempt amount made any offset tax-ineffective. Keep a separate schedule for a negligible-value claim or an income-loss election, because those claims need different evidence and timing from an ordinary disposal loss.

Frequently Asked Questions

Evidence and decision checks

A reliable share loss relief 2026 27 review starts by fixing the tax year and the date on which the relevant event happened. Record the person's or business's status, the income or transaction category, the amount before tax, tax already withheld, and any election or claim being relied on. Do not combine a headline figure with a final liability: the result can change when another income source, a payment date, an ownership interest or a qualifying condition is added.

Keep the source documents behind every important input. Depending on the subject, that may include payslips, invoices, bank statements, contracts, provider statements, travel records, HMRC notices, payroll submissions, valuations or correspondence. Where an amount is apportioned, write down the method and retain the underlying total. If a correction is made, preserve the original figure and explain the reason, date and evidence for the replacement.

Before relying on the result, check the current official guidance for the same tax year and jurisdiction. Distinguish enacted law from a consultation, draft measure, announcement or future proposal, and record the effective date. Reconcile the final estimate to the relevant return, payroll record or HMRC account. A calculator or explanatory guide can support a decision, but it cannot replace the eligibility test or the official filing and payment process.

Model your gains and losses with the CGT Calculator→, then read the Capital Gains Tax on Shares guide for the full disposal rules and the EIS and SEIS Tax Relief guide before investing in early-stage companies.

Official sources

• GOV.UK: Capital Gains Tax losses
• HMRC: Capital Gains Tax manual — CG51555
• HMRC: HS286 — negligible value claims and income tax losses on shares
• GOV.UK: Venture capital schemes tax relief for investors
• GOV.UK: Capital Gains Tax rates
• HMRC: Share reorganisation, takeover or merger