capital gains Options

[fatfish]

if i have shares which are losing money can i sell these shares now and use that to offset any gains next year
ie sell at a loss now say £5k next year gains of £12k so my allowance of is it £9800 plus £5k gives me £14.8k which means i could still make profits of £2.8k is this right
also how long do i have left to do this does the tax year start 5th of april

[sailing john]

Post removed as incorrect

Apologies

John

This post has been edited by sailing john: Apr 1 2008, 13:44

[Christopher]

The CGT allowance for the year ending 5.4.08 is £9,200. You can carry forward any unused losses indefinitely but gains must be used in the year to which they relate.

e.g.

Let’s say you make gains this year of 50,000
Less losses this year 20,000
Net gain 30,000
Less CGT allowance 9,200
20,800

Less losses brought forward 5,000

Taxable gain 15,800

Sorry, impossible to align figures on this board

[sailing john]

I think I could be wrong.

Thanks Christopher

[fatfish]

The CGT allowance for the year ending 5.4.08 is £9,200. You can carry forward any unused losses indefinitely but gains must be used in the year to which they relate.

e.g.

Let’s say you make gains this year of 50,000
Less losses this year 20,000
Net gain 30,000
Less CGT allowance 9,200
20,800

Less losses brought forward 5,000

Taxable gain 15,800

Sorry, impossible to align figures on this board

Thanks chris
regards
Phill

[Teal]

Most informative Christopher- thanks for sharing.

Just for clarification if someone were to make the trades as you stated, but with £20,000 profit and £20,000 loss.

Would they be able to register 9,800 tax free, and then offset £11,200 from their loss, and carry forward £9,800 as a loss for the next year.

Or would the entire £20,000 loss have to be registered and used to to reflect the fact that that year your profit was £0?

[Christopher]

Hi Teal,

I think your last statement is probably the right one but I am not sure. As a rule of thumb, if you are making sufficient gains that you think CGT maybe payable it is probably best to see a Tax Accountant. CGT is the most complex tax there is and the rules seem to change every year.

[fatfish]

Just emailed natwest share dept asked if i sell my shares and buy them back can i use the loss against capital gains their reply is below i thought if i made a loss on a share say 5k but made a profit on another say 10k i could offset this and not pay any capital gains am i reading this wrong??


You can sell shares held and repurchase them back, however this would not give you any tax benefit anymore. If you still wanted to do this, normal commission and stamp duty is applicable and there would be no improvement in the spread.

[sailing john]

Hi Fatfish

I think they are referring to the so called "bed and breakfast" rule where if you sell and buy back within 30 days it is treated as though you hadn't sold for CGT calcs. Check on HMRC website for more info.

John

This post has been edited by sailing john: Mar 25 2009, 17:25

[fatfish]

Not sure if this is a stupid question or not but,

if for the year i have gains of say £5k and losses of £1k which makes my gain for the year £4k I obviously have not reached the limit for paying capital gains so, can i carry the £1k forward incase i go over my limit of £9.6k the following year
ta
Phill

[Christopher]

Yes, you can carry forward your losses indefinately. If you have old losses to bring forward you should register them with the tax office.