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Where Taxpayers and Advisers Meet

Losses on share sales

boody
Posts:9
Joined:Wed Aug 06, 2008 4:10 pm

Postby boody » Fri Jul 25, 2008 7:41 am

I hope bettyone and billyboy understand the two tax experts explanations, because I am still confused. In one case it is mandatory to set off current losses against current year gains. Then you can carry forward losses for twenty or thirty years. Yet some losses are wasted. Then losses can be "set off" if brought forward. Is it being said that if for example you have four shares sold at a loss in one year you should use perhaps the two losses that exceed the gains by the smallest amount. Then the other two unused share losses can be carried forward to later become losses from "a earlier years." We have said losses (£8000)and ignored the possibility that in another case the same years losses might be £30,000 on the same sale profits of 15200. Are the other two unused losses wasted by law or later become shares from "earlier years." I think billyboy should phone his tax office.

Simon Sweetman
Posts:1690
Joined:Wed Aug 06, 2008 3:11 pm

Postby Simon Sweetman » Fri Jul 25, 2008 8:08 am

I have to say this appears plain enought to me. If in a year you have gains of £15200 and losses of £30000 then your figure for that year is nil and you have £14800 of losses to carry forward.

You cannot choose to use some losses and not others : that is not the way it works. And anyone who thinks you will do better by phoning HMRC has obviously not tried that recently.

billyboy26
Posts:9
Joined:Wed Aug 06, 2008 4:09 pm

Postby billyboy26 » Fri Jul 25, 2008 8:56 am

I thank all of you for trying to sort my CGT question out. Yes I am also confused. However, I am now going to simply advise the tax ofice (as in my (a) question) that I have made gains of £15,126 and losses of £8,900. Therefore, overall only a £6226 gain. After AE9200 this means nil tax due. I simply hope then the £2974 of unused loss can be carried forward and later be used as a loss from an "earlier year." If not then that is the law. I dont think I understand "you cannot choose to use some losses and not others" I take that to mean you add them all up and then bank any unused losses for later years. Don't worry I guess the thread has got out of hand and contradictory. Thanks again to all

billyboy26
Posts:9
Joined:Wed Aug 06, 2008 4:09 pm

Postby billyboy26 » Fri Jul 25, 2008 8:56 am

I thank all of you for trying to sort my CGT question out. Yes I am also confused. However, I am now going to simply advise the tax ofice (as in my (a) question) that I have made gains of £15,126 and losses of £8,900. Therefore, overall only a £6226 gain. After AE9200 this means nil tax due. I simply hope then the £2974 of unused loss can be carried forward and later be used as a loss from an "earlier year." If not then that is the law. I dont think I understand "you cannot choose to use some losses and not others" I take that to mean you add them all up and then bank any unused losses for later years. Don't worry I guess the thread has got out of hand and contradictory. Thanks again to all

CDavey9501@aol.com
Posts:513
Joined:Wed Aug 06, 2008 3:13 pm

Postby CDavey9501@aol.com » Fri Jul 25, 2008 8:58 am

Simon is correct.

It seems some people may confusing current year losses with losses carried forward from earlier years.

CDavey9501@aol.com
Posts:513
Joined:Wed Aug 06, 2008 3:13 pm

Postby CDavey9501@aol.com » Fri Jul 25, 2008 9:03 am

Billy,

If the loss was a carried forward loss from an earlier year then you would only need to use an amount to bring the net figure down to your annual CGT allowance. However this is a current year loss and so you have 'lost' the £2974.

newsboy
Posts:12
Joined:Wed Aug 06, 2008 4:09 pm

Postby newsboy » Sun Jul 27, 2008 11:05 pm

I have a similar cgt query. I am also confused by the various EXPLANATIONS. I don't want more explanations as to why its law. Simply, only my individual answer. I have losses on 3 shares sold this Tax year ended. Using only one of the 3 sale loses wipes out all my 5 sale gains after I use my 9200 AE. The only one sale loss used is actually £235 more than needed. I assume the not needed £235 is actually lost/wasted by law. (no credit c/f.)However, can I now carry forward the TWO not needed unused losses to future years? Or are they also lost as you can't "pick and choose."
I guess tax advisers understand tax explanations, lay people can't grasp it. Thank you

Simon Sweetman
Posts:1690
Joined:Wed Aug 06, 2008 3:11 pm

Postby Simon Sweetman » Sun Jul 27, 2008 11:42 pm

Newsboy, you add your total gains together. You add your losses together. You subtract the losses from the gains. If the losses exceed the gains then you have a loss to carry forward. If the gains exceed the losses then, and only then, the annual allowance comes into the picture.

newsboy
Posts:12
Joined:Wed Aug 06, 2008 4:09 pm

Postby newsboy » Mon Jul 28, 2008 12:21 am

Thanks Simon That explanation seems clear. I now know the Tax people want you to use losses up first. In that scenario it seems they take the AE back as you get no AE Tax break benefit from it. Its as if it doesnt exist. Clever on the part of the Revenue. It seems they give AE with one hand and take it back with the other. Thanks again.

Simon Sweetman
Posts:1690
Joined:Wed Aug 06, 2008 3:11 pm

Postby Simon Sweetman » Mon Jul 28, 2008 12:22 am

It seems a little hard to blame the Revenue - this has been the law since 1965 when CGT was introduced.


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