Sa 108

jimmo

Mikeyorks,
More for the benefit of others who may read this let me put some figures on this for illustration purposes.
Assuming the individual concerned does not make annual S A returns he or she still needs to follow the general principle of establishing the net capital gains or losses for the year concerned before allocating losses brought forward.
Year 1 CG loss £5,000 carried forward. No need for a return but the losses need to be formally claimed within the 4 year time limit.
Year 2 CG gain £8,000. That is within the annual exempt amount, £10,100. There is no liability. The unused losses brought forward are not required and are carried forward to year 3. No need for a return.
Year 3 CG gain £13,000. As that exceeds the annual exempt amount of £10,100 it is necessary to use £2,900 of the losses brought forward, leaving £3,100 unused losses to be carried forward to year 4. No need for a Return.
Year 4 CG gain £15,000. deduct unused losses brought forward £3,100 and the annual exempt amount £10,100. That leaves £1,000 chargeable to tax. Therefore a Return is required.
With that sort of history the person concerned will clearly need to keep his own records and, when making the Return for year 4 it would probably be a good idea to explain how the unused losses brought forward have been calculated..
I dont think I have missed anything but if I have, fire away.

Mikeyorks

jimmo wrote: »

I dont think I have missed anything but if I have, fire away.

Many thanks jimmo ........ I think that covers it immaculately. I just couldn't believe - but that seemed the only answer - that you keep your own record, on the back of the proverbial fag packet, of how you are using carried forward losses. Bit bemusing ........ but grateful of the comprehensive reply.

Now I will opt out of CGT responses again for the duration!

jimmo

StevieJ,
I hope my post at # 12 explains the principles. I think it would probably be quite a good idea for you to complete forms SA108 for your own records but do not send them to HMRC if you are not completing an SA return.
With regard to your 2008/09 losses you still have plenty of time to claim them and it would do no harm to do that now. If I were you I would do that by letter and include a question, perhaps asking them to confirm that because your net Capital Gains for 2009/10 are within the annual exempt amount you do not need to utilise any of your 2008/09 losses and they can be carried forward.
These days, HMRC dont do acknowledgements but they do reply to queries, eventually. When you get a reply, not only will it confirm the advice you have been given here but it will also be pretty good evidence that you have made a valid claim for your 2008/09 losses in the event of you having to utilise those losses at some time in the future.

StevieJ

Thanks Jimmo.