3U.K.For subsection (5) of section 3 (definition of taxable amount) there shall be substituted the following subsections—
“(5)For the purposes of this section an individual’s taxable amount for any year of assessment is the amount which, after—
(a)making every deduction for which section 2(2) provides,
(b)applying any reduction in respect of taper relief under section 2A, and
(c)adding any amounts falling to be added by virtue of section 2(5)(b),
is (apart from this section) the amount for that year on which that individual is chargeable to capital gains tax in accordance with section 2.
(5A)Where, in the case of any individual, the amount of the adjusted net gains for any year of assessment is equal to or less than the exempt amount for that year, no deduction shall be made for that year in respect of—
(a)any allowable losses carried forward from a previous year; or
(b)any allowable losses carried back from a subsequent year in which the individual dies.
(5B)Where, in the case of any individual, the amount of the adjusted net gains for any year of assessment exceeds the exempt amount for the year, the deductions made for that year in respect of allowable losses falling within subsection (5A)(a) or (b) above shall not be greater than the excess.
(5C)In subsections (5A) and (5B) above the references, in relation to any individual’s case, to the adjusted net gains for any year are references to the amount given in his case by—
(a)taking the amount for that year from which the deductions for which section 2(2)(a) and (b) provides are to be made;
(b)deducting only the amounts falling to be deducted in accordance with section 2(2)(a); and
(c)in a year in which any amount falls to be brought into account by virtue of section 2(5)(b), adding whichever is the smaller of the exempt amount for that year and the amount falling to be so brought into account.”