20/21 declared 2000 in gains and 341 in losses(in 4 trades).
21/22 declaring 20000 in gains and 16000 in losses(in 4 trades)
How would I go about preserving losses of 5000 from 21/22 and 341 from 20/21, for future tax years ?
I’m interested to know what trades you’d omit in the XLS you’re attaching in the self assessment and how you’d use the “losses for the year” and “Losses available to carry forward.” fields in the declarations of 20/21 and 21/22… Why declaring 20/21 ? Because a declared loss becomes an “allowable loss” that can be used or carried forward.
There’s little info with surgical precision about “Losses available to carry forward.” online apart from this article below in which it claims the forward losses can be only carried and offset if part of the same trade/asset…
Disclaimer: I have no clue about it, I don’t have CGT where I am.
But if I’m not mistaken, I believe in most countries with carried losses for CGT, you can only carry losses that exceeded your gains in the previous tax year?
I think when you are still posting a net gain, you cannot carry forward any of the losses.
I don’t believe “excluding a trade” from a tax year is allowed at all. When it comes to the tax man, you don’t get to cherry pick what you include or not.
You do get to choose when to sell your loss-making assets, so they appear in a year or an other. But after the sale, the transaction has to be reported in its own tax year.
you do not pick and choose, which trades to declare in your self assessment, and which to omit. Knowingly not declaring (loss or profit) a trade is actually classified as tax fraud and can get you fined (a lot more than you’d normally pay)
The losses you can claim against ( like @Dougal1984 and @Zergui mentioned) are net losses for a given financial year.
so: you’ve made
20/21 declared 2000 in gains and 341 in losses(in 4 trades).
21/22 declaring 20000 in gains and 16000 in losses(in 4 trades)
2020/21 -> 1659 net profit,
2021/22 -> 4000 net profit
so you don’t have any “loss” to claim in the future years. However if this was all your capital gains in those respective financial years, you still don’t own any tax since it is less than £12300 personal tax free allowance.
On a side note/off-topic, “january/february/march” are called “sales months” because this is what people actually look at their trades before next FY, and offload the instruments which have negative gains AND already in the pipeline to be sold. By doing this you can get your annual profit as close to 12300 as possible to maximise tax benefits.
Where do I need to report this in the SA form to save those 3700 in losses for the future tax years ?
I’m confused if is all related to the last question in the screenshot … which I answered YES to… otherwise it won’t let me know report the CGT part on the online SA form.
My understanding is that you have 4 years to claim a loss (I suspect that this is mainly for people who don’t do self assessment in which case they have 4 years to claim the loss and get HMRC to confirm recognition of the loss). if you do self assessment, my understanding is you claim the loss in your self assessment (I guess by clicking yes to the question you’ve shown).
Once you have registered a loss, I believe you can elect when you use that loss. Thus, in year0 you may make a loss which you register. In year+1, year+2… you may make profits but they are under the CGT allowance so you don’t need to use the loss in those years. In year10 you make a huge profit greatly exceeding the CGT allowance and you can elect to use the “saved” loss to offset some of that profit.
In terms of what others have said. They are correct you can’t be selective carrying forward some losses and not offsetting them in the current year against gains in that year. I found this useful explanation:
This topic has made me think of more questions then ever!
Say i made a huge loss 2 years ago, does that mean i need to do a self assessment within the next 2 years, and if i havent then that is lost forever? But if I do a self assessment then I can claim back that loss in any future year in my lifetime? Can you claim fees against losses/profits?
If you do a self assessment for 1 year do you then have to do one for every year from then on? What happens if you dont make more than 12k outside of PAYE, do you still need to do a self assessment?
You don’t need to make a self assessment you can apply to have a loss recognised by HRMC and then use it in the future. You can apply within 4 years of the loss.
To answer your next question - I don’t know how you apply to have the loss recognised if its not by doing a self assessment. Clearly you will not be filing a self assessment 3 years later so there is a separate option.
Generally once you are doing self assessment you carry on doing so until your circumstances change such that it is no longer necessary.
PAYE isn’t a taxable “gain” in the context of CGT so it was the reference to 12k “outside of PAYE” that confused me.
I’m not sure what “fees” you are referring to in CFD. Normally I would associate the term “fee” with the buy/sell transaction fee some brokers charge. Some fees including broker fees and stamp duty can be included when calculating gain/loss for cgt purposes. With CFD fees and interest are embedded within the price so are included (you buy at one price and sell at another and the difference defines your profit/loss).
I don’t know but my assumption would be that they are integral to the product and part of the profit/loss made and thus should be part of the calculation but I would get confirmation either from the HRMC or a professional. They are a necessary part of the product and thus the profit so I would consider they are considered the same as broker fees etc but I assume that there are defined rules about what can or can’t be claimed
The answer to the last question in the form (Do you want to claim …) should be “No”. You are reporting a loss not claiming previous losses. You will answer “Yes” next year if you make a profit.
Look again and see the total value of the shares you sold, it will possibly be more than ÂŁ49,200.
You should change second answer: say losses are deducted (1800). Net gain is 0. The extra losses of 1900 are not to be mentioned at this point. You keep a note for yourself and apply them against next year’s gains. Fourth answer should be No.
Ok thanks @Richard.W! Will just change that answer to YES and rest to NO!
So then I can carry over 1900. Question how do I declare these if next year 23/24 I have gains (help me God). Provide an XLS with the trades from 23/24 plus the losses from 22/23 ? or all trades from 22/23 plus 23/24 ?
Hi @Richard.W, sorry to bother you. I have filled the SA form as instructed and it’s telling me “Not required to complete capital gains section” as expected…
To recap: for this current SA form (22-23). I have these.
GAIN 1800
LOSSES -3700
How do I declare the £1900 of losses in the SA of 23/24 if I need to use them ? I made the usual XLS with all the trades done for 22/23… do I need to attach it somehow to this year SA(22/23) form ? even if the website says “Not required to complete capital gains section” ?
What happens if you select Yes as the answer to the final question? I suspect that will lead you to completing the capital gains pages and recording a loss that can carry forward to next year.
You could also try No as answer to the second question.
You just want to give answers that lead you into completeing the Capital Gains pages.
I have never been in this situation myself, so can’t guide you from experience.
A professional once told me to make use of the comments boxes at the end of each section to tell HMRC things you want them to know. You can write something like “I figure I have xxx losses to carry forward to future tax years.”
