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Where Taxpayers and Advisers Meet

Mistake crystalising gain

Scooby99
Posts: 2
Joined: Fri Aug 19, 2011 1:21 pm

Mistake crystalising gain

Postby Scooby99 » Fri Aug 19, 2011 1:23 pm

Hi – please help !

I am a financial adviser who, wholly inadvertently, advised a client to move between unit trusts which has crystallised a gain. The transaction took place around 6 weeks ago, and I understand that his annual CGT allowance has been fully used.

As this was my error, and the transaction is very recent, is there a process for me to explain the error to HMRC to avoid the client being subject to CGT ?

Many thanks for any help you can give.

Brightonian
Posts: 99
Joined: Wed Aug 06, 2008 3:31 pm

Re: Mistake crystalising gain

Postby Brightonian » Fri Aug 19, 2011 2:03 pm

Hi,

I feel for you - I've done this myself! If the disposal had been less than 30 days ago, you could have repurchased the same funds and the bed and breakfasting rules would have applied.
If the client has a holding standing at a loss, you could crystallise a loss to match the gain. Of course, you should only do this if it makes commercial sense. You shoudl not let the tax tail wag the investment dog.
HMRC won't waive the tax. if the worst comes to the worst, your firm may have to pay the bill.

Scooby99
Posts: 2
Joined: Fri Aug 19, 2011 1:21 pm

Re: Mistake crystalising gain

Postby Scooby99 » Fri Aug 19, 2011 2:15 pm

Hi Maggie - thanks for this. I thought so but it was worth asking.


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