Availability of capital losses

The taxpayer (G) made a gain on a property disposal in 2014-15. In his return he reduced the amount of the gain by a capital loss incurred in 1998. HMRC denied relief for the loss on the basis that TCGA 1992 s 16(2A) requires that to be allowable a loss must be notified to HMRC as if it were a claim. It was common ground that the taxpayer had not included the loss in his 1998/99 return. His former accountant (M) gave evidence that he had submitted a letter within the time limit for notification including a computation of the loss. HMRC held no copy of that letter and neither M nor G could produce a copy.

M did however produce during the course of the HMRC enquiry a copy of a handwritten computation which was barely legible. The tribunal accepted that it had not been recently created...