Can Off-plan overseas property loss be set against capital gains?

In 2007 I paid the first instalment for a new build beach property in Brazil. Construction was very slow and subsequently ceased entirely with the building company becoming bankrupt in 2015-16. Together with others in the U.K. who found themselves in the same situation, legal action was commenced in the Spanish courts ( the building company’s lawyers and insurers against whom the action was taken were Spanish based ). The Spanish court finally heard the case in February 2023 and did not find in favour of the claimants. Hence I have sustained an irrecoverable loss of approximately £20000, which crystallised in February 2024. Query: Can this loss be set against capital gains in 23-24?

Hi Old Geezer,
You would need to identify whether any asset was acquired when you made this payment of £20,000.
Ultimately, a Capital Loss can only be realised upon the disposal of an asset, whether that's a property, shares in an investment company or interest in or right in or over an asset.
You will need to identify what you actually acquired (if anything) and when this asset was disposed of to allow you to identify if any loss arises and when the disposal took place. 
CG12700P - Introduction and computation: occassions of charge: disposal of assets: contents
Thank you. 

Thank you for the response. Our situation is very similar to that of the taxpayer in Lloyd Webber & another v HMRC (2019) where the FTT found for the taxpayer , albeit the sums involved are much lower. As in LW -HMRC, the assets acquired were contractual rights. The subsequent failure of the builder to deliver and that builders bankruptcy meant that the only way to avoid a loss was to take legal action against the lawyers & insurers and in the event the action failed. So the “ disposal” of the assets ( and the crystallisation of the loss) occurred when the Court ruled against the claim, in February 2023. So there were assets acquired ( contractual rights ) with tangible market value which subsequently were liquidated/ disposed of as a consequence of th3 Spanish courts decision. I note that HMRC has not appealed the FTT decision in the Lloyd Webber case so presumably the logic applied by the FTT should apply in similar cases?

Hi Old Geezer

Unfortunately we cannot confirm if the ruling of Lloyd Webber v HMRC would apply in this case as this is determined based on the facts of the case and cannot be discussed on this forum.
You should contact us directly if they wish to discuss this further.
However, they may wish to review CG40 re capital sums derived from assets CG12940 - Capital sums derived from assets: s22 TCGA92

Thank you