Postby JTec » Thu Dec 05, 2019 3:53 pm
Sorry, ignore my last message, the advice I received from the HMRC tax 'Advisor' was wrong.
I have since read the HMRC manual 'CG21500' & spoken to HMRC again (a tax 'Technician' this time) & 'maths' reply was actually correct.
You have to offset tax losses for that year against your chargeable gains for that year, whether your chargeable gains are above or below the annual threshold, & you can ONLY carry forward losses for that year if they exceed your chargeable gains. However, once you have carried forward a loss, you can carry on forwarding it indefinitely into future years until such times are you need it (or part of it) as & when you exceed the annual threshold. So basically it's quite flexible once you have carried forward a loss, but not very flexible in the tax year the loss occurred, as you can end up wasting some or all of your annual allowance.
(based on £12000 annual exempt amount)
Gains £8000, Losses £5000, therefore Net Gains £3000, No CGT to pay & nothing allowed to be carried forward.
Gains £16000, Losses £5000, therefore Net Gains £11000, No CGT to pay & nothing allowed to be carried forward.
Gains £24000, Losses £5000, therefore Net Gains £19000, CGT on £7000 to pay & nothing allowed to be carried forward.
Gains £8000, Losses £10000, therefore Net Gains -£2000, No CGT to pay & £2000 Partial Loss allowed to be carried forward (indefinitely).
I hope this clarifies it once & all for everyone.