One of the most useful — and frequently overlooked — CGT rules is that capital losses from any source can be set against capital gains from any other source in the same tax year. If you sold shares, funds, or other investments at a loss in the same year that you sold a residential property at a gain, those losses reduce the taxable gain on the property.
How the offset works
Capital gains and losses are pooled across all asset types. Shares, unit trusts, ETFs, cryptocurrency, commercial property, and residential property all sit in the same pool for CGT purposes. If your total gains across all assets exceed your total losses, the net gain is what gets taxed.
For example:
- Property gain: £40,000
- Share losses in the same tax year: £15,000
- Net chargeable gain before annual exempt amount: £25,000
- Annual Exempt Amount (2026/27): £3,000
- Taxable gain: £22,000
Without the share losses, the taxable gain would have been £37,000. The offset saves a basic rate taxpayer around £2,700 in CGT, and a higher rate taxpayer around £3,600.
Must the losses happen in the same tax year?
Losses made in the same tax year as the gain are applied first, before any losses carried forward from earlier years. You cannot choose to skip them.
If you have losses from a previous tax year registered with HMRC, those carry-forward losses are applied after the current-year losses. Crucially, carry-forward losses are only used to the extent needed to reduce gains to the Annual Exempt Amount — you do not have to use them to bring gains below £3,000. Any excess continues to carry forward indefinitely.
Does this affect the 60-day CGT return?
Yes — and this is where careful attention is needed. When you file the 60-day CGT return for a property disposal, you need to estimate your income and other gains for the full tax year to calculate the provisional CGT due. If you have already crystallised share losses before the property completes, you can include those losses in the 60-day return and reduce the payment on account accordingly.
If the share losses occur after the property completes but within the same tax year, they are still taken into account — but through your annual Self Assessment return, not the 60-day return. You will have overpaid via the 60-day return and can claim a refund on your Self Assessment.
What qualifies as an allowable loss?
Not every loss counts. For a capital loss to be allowable:
- The asset must be a chargeable asset (shares, investment property, crypto all qualify)
- The disposal must be at arm's length or to an unconnected person — losses on sales to family members at undervalue are restricted
- The loss must be formally reported to HMRC — it does not arise automatically
Losses on assets that are exempt from CGT (such as your main home under Private Residence Relief, or assets held in an ISA) do not generate allowable losses.
Can I sell shares at a loss deliberately to reduce my property CGT?
Yes — this is called "bed and cash" and it is legitimate. You sell shares at a loss before the property completes, crystallise the loss, and apply it against the property gain. If you want to retain the investment, you or your spouse can repurchase the shares after 30 days (the 30-day "bed and breakfast" rule prevents you buying back the same shares within 30 days). Alternatively, your spouse can buy back immediately since the anti-avoidance rule does not apply across spouses.
What about crypto losses?
Cryptocurrency is a chargeable asset for CGT purposes. Losses on crypto disposals in the same tax year as a property sale can be offset against the property gain using exactly the same rules as shares. You must be able to document the acquisition cost and disposal proceeds for each crypto transaction.
Reporting the losses
Losses must be reported to HMRC. If you are filing a Self Assessment return, you report them on the capital gains pages (SA108). If you are not in Self Assessment, you can claim losses by writing to HMRC within four years of the end of the tax year in which the loss arose.
If you need to time a property sale alongside crystallising investment losses, or want to understand how your 60-day return interacts with carry-forward losses, a Chartered Accountant/Chartered Tax Advisor can model this for you before you proceed.