Taxation of Chargeable Gains Act 1992 section 261E

Meaning of "the maximum amount" for purposes of section 261D

Section 261E defines "the maximum amount" — a cap used when converting excess post-cessation trade or property relief into a capital gains tax loss under section 261D.

• The maximum amount is the figure on which a person would be chargeable to capital gains tax for the year, calculated before certain deductions and reliefs are applied.
• Allowable losses brought forward from earlier years are ignored when calculating the maximum amount.
• The annual exempt amount (the tax-free allowance for capital gains) is also left out of the calculation.
• Any relief already claimed under section 261B (trade losses treated as CGT losses) or section 261D (post-cessation relief treated as CGT losses) is similarly disregarded.