Capital Gains and Losses Across Different Years?

fcmisc

Hello,

If I had £50k of capital gains losses last year, but made £50k of gains this year, what sort of tax liability would I have?

Thanks,

Aegis

None, your losses in previous years can be offset against gains in future years. You should still be carrying forward £10,600 as your CGT annual exemption is used before any carried forward losses.

grey_gym_sock

nil.

when you have net losses in a tax year (i.e. total losses are greater than total gains), you can carry the net losses forward to later years.

when you have £50k of net gains in a tax year, the first £10.6k is covered by the annual exemption, the other £39.4k is set against part of the losses carried forward from the previous year (leaving you £10.6k of previous losses to carry forward into future years).

so actually, if you make £50k net losses in 1 year, you could make up to £60.6k gains in the following year without having any CGT liability. anything in excess would be taxable (unless you had more losses carried forward from earlier years).

you do have to claim losses within some time limit if you want to carry them forward.

Biggles

grey_gym_sock wrote: »

you do have to claim losses within some time limit if you want to carry them forward.

You have to claim the losses (merely by notifying them to HMRC) within, I believe, 6 tax years.

Once claimed, they can be carried forward indefinitely until you have a gain (or gains) to actually use them against.

Pachira

Information on how to claim a loss and the time limits for doing so here:

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


How to claim a loss - and the time limits for doing so

You need to tell HMRC about losses before you're allowed to deduct them from your gains.

If you made the loss in 1996-97 or a later tax year, you need to tell HMRC in writing. There are time limits for doing so, see the section below for more on this.

Time limits for claiming losses - 1996-97 and later tax years

If you completed a Self Assessment tax return for the year in which you made the loss, the time limit for claiming a loss is four years from the end of that tax year. So if you made a loss in 2008-09 you must make the claim by 5 April 2013.

If you didn’t complete a Self Assessment tax return for the year in which you made the loss, you may have longer to claim the loss, use the table below to check.

Time limits for PAYE and other customers outside Self Assessment

Tax year | You must claim by:

2008-09 | 5 April 2013

2009-10 | 5 April 2014

2010-11 | 5 April 2015

2011-12 | 5 April 2016



How to claim a loss

If you normally complete a Self Assessment tax return, there are places to show losses on the Capital Gains Tax summary pages.

If you don't normally complete a Self Assessment tax return, you should claim the loss by writing to HMRC.

You must keep any records showing how you worked out your loss and include your calculations with your tax return or correspondence.