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A capital loss is a term used to describe when you make a loss on selling an asset. An asset, in this context, could be a property, shares, a cryptocurrency, fine jewellery, a vintage car etc. And if you sell one of these assets for less than you originally bought it, this would be considered making a capital loss.
Check out this example of making a capital loss:
You’re also allowed to claim losses on assets that you still own if they become “worthless”.
There are a number of things you can do with losses when it comes to tax. Here’s a selection:
If you sell an asset for more than you bought it for, you make a profit. This profit is known as a capital gain. Profits that exceed the tax-free Capital Gains Tax Allowance mean that you’ll have to pay Capital Gains Tax on them.
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