Losses on the disposal of shares are usually treated as capital losses for tax purposes, and will be available to set off against capital gains in the same year or future years (without time limit). So long as certain conditions are met, losses on the disposal of shares can be set against income in the year of the loss or the preceding year. CGT relief is available for losses arising on loans to traders, so long as certain requirements are met. Principally, the loan must become irrecoverable, and the right to recover the loan cannot be assigned. It is possible to capitalise loans into shares, and if the shares subsequently give rise to a loss, this can, so long as various requirements are met, be set off against income. There are also a number of pitfalls that need to be borne in mind before making such a claim.