tax and share losses

bear23

[FONT=&quot]I am self employed and recently got involved with buying banking shares as a pure adrenaline gamble, this has proved to be at present a little costly on paper and I was wondering if I could off set this loss against this years tax bill. I am assuming I would have to sell my shares (at real loss) within this tax year and then buy back to maintain my position, any advice appreciated[/FONT]

RayWolfe

You can only offset losses against gains.

mrposhman

I think you can offset current losses against future year gains, so if you sell your shares now and you sell next year at a profit that is greater than the tax free sum then you should be able to offset this years losses to reduce your tax exposure. Should work well unless you miss a bounce when you are out of the shares.

medders2604

If you sell the shares and take a loss you can't rebuy them within 30 days and carry the loss forwards, worth bearing in mind as it means there is a longer period that you are out of the market and potentially missing any bounce.
You have to notify HMRC of the loss and can then carry it forward to use against future gains for as long as is necessary.

cheerfulcat

Quite right, mrposhman - just to add that the taxman must be notified of the disposals and consequent loss within 6 years of the transaction(s).

bear23

thanks for the advice, will be a more knowledgable now before i go to my accountant