2017 SA905 - deducting losses

I am completing a 2017 tax return for an estate which made a chargeable gain on a residential property and losses on shares. With the differing CGT rates, the 2017 form has two separate sections, one for residential property gains and losses and one for other gains and losses. There is nowhere on the form to deduct losses on shares from gains on residential property. Is it no longer permissible to do this or is it a glitch with the form?

Lorna Sansom
Blandy & Blandy LLP

It certainly should be possible - the new s.4B TCGA expressly provides for losses to be set against the gains attracting higher rates (ss.(1) expressly refers to ss.(2) which describes the situation).

The losses on shares appear to be deductible from residential property gains at Box G14 in the calculation worksheet (SA110 Notes ), which (rather helpfully for HMRC) appears to set them against resi and NRCGT gains before other gains. I don’t make a habit of completing SA108 but it looks like you just set out the losses there and the deductions take place in the calculations.

I don’t know whether this has passed through into the HMRC or commercial software.

Andrew Goodman
Osborne Clarke LLP

The notes which accompany the form (SA905 Notes) say on page TCN5 that for box 5.2 you should enter the losses from TC1 and “any losses that are included in the total from TC2 which you wish to set against the gains for residential property”.

Jeremy Crouch

Thank you for confirming that I am not being stupid! There is obviously a glitch with our software - if I enter the TC2 losses in 5.2 it tells me there’s an error! Paper return it is then until it gets sorted.

Lorna Sansom
Blandy & Blandy LLP