Share Loss Relief: How to Offset Investment Losses in 2025

Investing in shares always carries some level of risk, and not every investment will bring a profit. The good news is that if you’ve suffered a loss on qualifying shares, you may be able to claim Share Loss Relief to reduce your tax bill. Our part-time finance director can help you navigate the complexities of tax relief, ensuring you make the most of available allowances and deductions.

What Is Share Loss Relief?

Share Loss Relief allows you to offset losses from the disposal of certain shares against your income tax instead of just capital gains. The loss must have arisen on a qualifying disposal of shares that you acquired by subscription in a qualifying trading company. This can be particularly beneficial if you don’t have sufficient capital gains to offset your losses.

Who Can Claim?

You can claim Share Loss Relief if:

• You subscribed for new shares in a qualifying unquoted company. Shares acquired under an Enterprise Investment Scheme (EIS) or Seed Enterprise Investment Scheme (SEIS) are also eligible for this relief.

• The company was UK-based, unlisted, and met certain trading criteria at the time of your investment.

• The shares were sold at a loss or became worthless (negligible value claim).

How Does It Work?

The loss can be deducted from your taxable income for the current or previous tax year, potentially reducing your income tax bill at your highest rate of tax (20%, 40%, or 45%).

Example Calculation

If you buy £10,000 of EIS shares you can claim 30% income tax relief on the purchase, giving you a net cost after tax relief of £7,000. If you then sold the shares for £3,000, you have a £4,000 loss. If you’re a higher-rate taxpayer (40%), you could reduce your income tax bill by £1,600 (£4,000 × 40%).

Need help maximising your tax relief? Contact our part time Finance Director for guidance on how to offset losses and optimise your tax position.