Capital Gains Tax on Bed & ISA

westy22
westy22 Posts: 1,105 Forumite
First Anniversary First Post Combo Breaker
in Savings & investments
I am completing a Bed and ISA transaction to shelter some shareholdings. Some of the shares that will be sold are in profit and some are in loss.

When I complete the CGT section of my SA do I totally ignore the 'in profit' ones as the capital gain is well within the annual allowance and then claim the full loss on the losers - or do I have to offset the gains from the losses and then only claim the net loss?

I can't seem to find any definitive guidance on this on the HMRC site.

Thanks for any help.
Old dog but always delighted to learn new tricks!

Comments

  • SnowMan
    SnowMan Posts: 3,358 Forumite
    Name Dropper First Anniversary First Post Photogenic
    edited 25 February 2013 at 9:43AM
    I'm no tax expert, but I think you have to deduct the realised losses from the realised gains for this tax year and only then if there are losses can you carry them forward.

    So you can't choose to use just total gains within your annual allowance and then carry forward losses.

    So if total of gains for this tax year are £8,000 and total losses for this tax year are £6,000 you can't carry any of the loss forward.

    Seems to say this at

    http://www.hmrc.gov.uk/cgt/intro/losses.htm

    The important word is the must below
    Step 1 - You must first deduct any allowable losses from gains you've made in the same tax year. For example, if you've made both gains and losses in 2011-12, you must deduct those losses from those gains.
    Tactically it might be worth just selling assets that currently show a gain as the losses while unrealised can effectively be carried forward. That assumes you have enough capital to fund this years ISA.
    I came, I saw, I melted
  • Biggles
    Biggles Posts: 8,209 Forumite
    Combo Breaker First Post
    Snowman is right.

    In addition, if the total proceeds from selling totals more than £42,400, you can't just 'ignore' anything, you will have to report all the sales to HMRC, whether you had a net gain or loss.
  • westy22
    westy22 Posts: 1,105 Forumite
    First Anniversary First Post Combo Breaker
    Tactically it might be worth just selling assets that currently show a gain as the losses while unrealised can effectively be carried forward. That assumes you have enough capital to fund this years ISA.

    Great suggestion - thanks, SnowMan
    Old dog but always delighted to learn new tricks!
  • grey_gym_sock
    grey_gym_sock Posts: 4,508 Forumite
    you could even have some tax years when you only sell assets showing a gain (keeping the total gain under the annual allowance), and other years when you only sell assets showing a loss (so you can carry the losses forward).
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