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Where Taxpayers and Advisers Meet

Electronic Gold Bullion - Losses Allowable for CGT?

JetPil0t
Posts:9
Joined:Sat Jul 11, 2015 12:19 pm
Location:England
Electronic Gold Bullion - Losses Allowable for CGT?

Postby JetPil0t » Sat Jul 11, 2015 12:45 pm

Hello there,

I'm new to the site but a quick search suggests that there has not been a definitive answer given to this before, so please could someone help a guy who is NOT very clued up about tax??

I liquidated my Ltd Company (just me as an employee) in the 2012/2013 tax year and paid about £3800 CGT to do so. In the 2013/2014 tax year I didn't pay any tax as I earned below the personal allowance. In the 2014/2015 tax year I was back to earning above the personal allowance and in addition I have to complete a return, as I had a lodger in my main residence that brought in more than the annual exempt amount, have some expense allowances to claim, etc.

So with all that background information, here's the question: I bought about £25k of gold bullion electronically through "a well known website", and since that time unfortunately the gold price has tanked. I'm thinking about getting out, but would be more inclined to do so if I could use my "loss" to offset personal tax.

The purchases I made of gold were:
4 Feb 2011: £5k and
2 Mar 2012: £20k

Currently my account is worth about £18k, so I have made a £7k loss so far (and counting!).

So here's the question: If I sell today, can I use that £7k loss to offset against either my 2014/2015 tax liability (since I need to do a return anyway, this would be convenient) or if not, could I use it to offset against my current tax in the 2015/2016 tax year. If the answer to either is yes, how do I do it? (HMRC self assessment online is my preferred method of submitting returns).

Any advice greatly appreciated, feel free to send PMs or reply, if you want further information!

King_Maker
Posts:6538
Joined:Wed Aug 06, 2008 3:22 pm

Re: Electronic Gold Bullion - Losses Allowable for CGT?

Postby King_Maker » Sat Jul 11, 2015 2:19 pm

As you have not sold the Gold yet, there is no Loss.

If you were to sell today, the Loss will crystallize in 2015-16 tax year.

How the Loss is treated depends on whether you are a trader or investor - the former is subject to Income Tax, the latter to Capital Gains Tax (CGT).

JetPil0t
Posts:9
Joined:Sat Jul 11, 2015 12:19 pm
Location:England

Re: Electronic Gold Bullion - Losses Allowable for CGT?

Postby JetPil0t » Sat Jul 11, 2015 2:41 pm

Hi, thanks for the reply.

So (assuming I sell), the loss can ONLY be applied to the 2015/2016 year not a future or past year?
Forgive the next stupid question, but what kind of tax (eg: PAYE, other?) could this loss be offset against? An example might be an easy way to explain possibly!?

I would not class myself as a trader as these are the only 2 purchases I made using the account and this would be one sale, at a loss. I would class it as a (failed!) investment.

LozaACCS
Posts:1504
Joined:Wed Aug 06, 2008 3:55 pm

Re: Electronic Gold Bullion - Losses Allowable for CGT?

Postby LozaACCS » Sat Jul 11, 2015 4:41 pm

If ever there was an asset class that does not do what it is supposed to do, it is gold.
I agree that a disposal would be subject to CGT.
It is not much of a suggestion but (assuming the loss is realised in 15/16) the only way to get relief against the gain in 12/13 is for you to die in 15/16 (I said not much of a suggestion).
I do not believe there are any provisions allowing your potential loss to be offset against your other income

King_Maker
Posts:6538
Joined:Wed Aug 06, 2008 3:22 pm

Re: Electronic Gold Bullion - Losses Allowable for CGT?

Postby King_Maker » Sat Jul 11, 2015 8:39 pm

Yes, prima facie, this seems to be a CGT Loss.


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