Capital Gains Scenario

MrSafeGaz

Hi there,

Apologies if this has been posted before, I could not find a thread which answered this specific scenario. I have been playing with the idea of investing in shares and think I fully understand the various CGT scenarios associated with this bar one: -

If towards the end of a financial year I sell some shares at say £10600 profit (after taking fees etc. into account). This would effectively mean I have made £1000 taxable gains and subsequently owe £180 in CGT. If prior to the ending of the financial year I reinvest all £10600 and then after entering the new financial year the company I have shares in goes bust leaving me with nothing, would I still owe £180 in CGT?

Thanks in advance!

fengirl_2

If you make a gain in one tax year, you pay tax on that gain. It does not matter what you do with the money. If you make a loss, you carry the loss forward against future gains, it cannot be set against gains in a previous year.

trevormax

fengirl wrote: »

If you make a gain in one tax year, you pay tax on that gain. It does not matter what you do with the money. If you make a loss, you carry the loss forward against future gains, it cannot be set against gains in a previous year.

Indeed, unless you are unfortunate enough to die, in which case it can be carried back for three years. Also if you make a gain and a loss in the same tax year, the net amount is used. Lastly I believe you must use all current year losses before using your annual exemption or any losses brought forward from a previous year.