Tax and SARS knowledge base
Can I carry a capital loss forward to future years?
Can I carry a capital loss forward to future tax years?
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Direct answer
Yes, an assessed capital loss can be carried forward to future tax years, but it is ring-fenced for capital gains. SARS says that an assessed capital loss cannot reduce ordinary income and can be set off only against capital gains arising in future years of assessment.
Keep the assessment that establishes the loss. A broker's loss figure is useful evidence, but it is not the same as the balance determined on your SARS assessment after the year has been completed. The carried-forward amount should be reconciled every time a later capital gain is reported.
What this means in practice
The process begins in the year of the loss. You need a supported capital-gains schedule, the relevant ITR12 completion and the assessment outcome. Once a loss remains after the current-year CGT calculation, it is an assessed capital loss that can be relevant later. It does not expire merely because you have no capital gain in the following year, but the amount must be traced accurately.
Maintain a one-page carry-forward register. Record the assessment year, assessed capital loss confirmed on the ITA34, reference to the return, and any amount used against a later gain. Attach the calculation, broker evidence and SARS notices. This avoids a common error where someone uses the same loss twice or replaces the assessed number with a broker's later portfolio estimate.
When a later capital gain occurs, complete the current ITR12 capital-gains information with the brought-forward balance supported by the prior assessment. Recalculate the current year from the source documents. The future gain may be smaller than the carried-forward loss, in which case a balance may remain. Do not assume the full amount must be used in one year.
Do not mix this record with an ordinary assessed loss from a business. An assessed capital loss has its own limitation. It is also separate from a foreign assessed loss, which has additional rules. If your investment accounts contain foreign assets or the past return used an unfamiliar code, take advice before bringing the balance forward.
Step-by-step
- Confirm the original loss.
Gather the original ITR12, ITA34, disposal schedule and broker records. Locate the amount SARS assessed, rather than relying on an old spreadsheet alone.
- Check for later changes.
Review whether SARS issued a revised assessment, verification result or objection outcome that changed the original amount. Use the latest valid assessment.
- Create a carry-forward register.
List the opening balance, year, supporting assessment and any later utilisation. Keep the register alongside the actual return documents.
- Recalculate the new year first.
Prepare current-year capital gains and losses from contract notes and base-cost evidence. Do not bring forward a loss without also completing the new-year facts.
- Apply the balance in the current return workflow.
Use the current ITR12 guide and retain screenshots or PDFs of the completed section. Check the new assessment after submission.
- Preserve the new closing balance.
Update the register from the assessment, not from an assumed calculation. This becomes the starting evidence for the next relevant year.
Documents and records to keep
- ITR12 and ITA34 for the original loss year.
- Subsequent assessments, revisions and correspondence.
- Broker contract notes and CGT schedules for every relevant year.
- A carry-forward register with references to source documents.
- Supporting documents for the later capital gain.
Important limits and exceptions
This article covers a properly assessed capital loss, not a general investment disappointment or an ordinary business loss. Do not reduce salary, interest or other ordinary income using the balance. Do not treat it as a refund claim. It is used only in the CGT framework against qualifying capital gains.
Use the correct year of assessment and current SARS return process. A subsequent change to an old assessment can change the carried-forward number. Foreign loss, connected-person transactions, personal-use assets and revenue transactions can all need separate consideration.
When to get tailored advice
Seek advice where the opening balance does not match SARS records, the loss is sizeable, foreign assets are involved, a return is under verification, or past returns were completed without a full schedule. TaxProof can help organise the audit trail, while a practitioner can check the detailed CGT treatment.