CGT Tax Losses available to be carried forward

I’m confused on this point and have opened a case on the HMRC forum that didn’t really clarify anything for me:

https://community.hmrc.gov.uk/customerforums/sa/5a9ab5d6-89e9-eb11-ba5e-00155d3bb8ef

Take this scenario:

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.

I think Zergui is right. You can only carry forward crystallised net losses.

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.

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