Why is TaxCalc using my losses brought forward when my tapered gain is below the annual exemption?
A. When calculating capital gains there is an order specified by HMRC of how losses should be allocated. First of all the gain should be calculated with reference to indexation if relevant, the next step is to then allocate firstly the losses of the current year, then losses brought forward, finally if eligible, taper relief. Losses are allocated to reduce your capital gains to the level of the annual exemption BEFORE taper relief.
