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Capital Gains Tax on Bed & ISA
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# 1
westy22
Old 25-02-2013, 6:47 AM
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Default Capital Gains Tax on Bed & ISA

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.
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# 2
SnowMan
Old 25-02-2013, 8:17 AM
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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

Quote:
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.
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Last edited by SnowMan; 25-02-2013 at 8:43 AM.
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Biggles
Old 25-02-2013, 9:04 AM
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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.
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# 4
westy22
Old 25-02-2013, 9:06 AM
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Quote:
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
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grey gym sock
Old 25-02-2013, 9:36 PM
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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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